Americans That Get It: 38%–Those That Don’t: 30%

From Rasmussen:

A new Rasmussen Reports national telephone survey finds that 30% of voters nationwide believe the $787-billion economic stimulus plan has helped the economy. However, 38% believe that the stimulus plan has hurt the economy.

The underlying reason for skepticism about the stimulus plan is that 50% of voters believe increasing government spending is bad for the economy. Twenty-eight percent (28%) believe government spending helps the economy.

I guess that leaves 22% who don’t know.

Those who say the stimulus has hurt the economy are correct, the others are wrong. The difference is this: those who think government spending helps the economy don’t understand where money comes from. They think it comes from the government, from Obama’s stash, or somewhere. It’s true that the government prints little pieces of paper that represent money, but those chits are not real money. We know that because they become worthless when the productive wealth they stand for decreases or disappears. In other words, while government has paper and printing presses, it has no real money.

Real money i.e., wealth, is created by the productive activities of the people. Wealth is not produced by anything the government does. Government can only affect wealth production by inhibiting it with high taxes and over regulation or facilitating it with low taxes and less regulation of economic activity. The only way government gets any wealth at all is when politicians take it away from the people who produced it. Politicians do this in two ways, by levying taxes on the productive efforts of the people and borrowing by selling treasury bonds.

Those who believe government spending hurts the economy understand that the only way government can spend a single dollar is to take that dollar from someone who earned it with his or her own skills, labor and investment. They understand that government spending is analogous to taking a bucket of water out of one end of a swimming pool and dumping it in the other end and thinking one has raised the water level. In fact, the water level has gone down due to the evaporation and shrinkage of some of the water while it is being transferred from one end of the pool to the other.

Evaporation of money i.e., wealth, occurs when government takes money out of one part of the economy and then puts it back in somewhere else. And that’s why politicians, bureaucrats, and public unions love government spending. They get the skim. They get some of the wealth that is produced by others, without doing anything themselves to produce any wealth. That’s what they call “good work if you can get it.”

The evaporation of wealth is what hurts the economy, and the hurt is measured not just by the amount of real wealth that is destroyed but also by the wealth that would have been created but isn’t because of government meddling in the economy.

See also, Government Spending Does Not Create Wealth

UPDATE: OK, you’re in the 38% that believes the stimulus has hurt the economy, or if not, maybe I’ve convinced you to switch to our side. What about TARP? Has that been good for the economy? No, it hasn’t. Not at all. To see why, and get a little deeper into this, check this out: The Most Redeeming Feature of Capitalism is Failure.

Failure is not a bug, it’s a feature.

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