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Sandy says “Stimuli Don’t Work!”

November 2, 2012

Over the space of two days, we had a natural law lesson on why Keynesianism is a counter-productive method of solving our economic woes [First and foremost we need an end to debt-based money, but we won’t get it until the majority of voters refuse to co-operate with its imposition. Read and promulgate the encyclical Vix Pervenit].  The “massive stimulus” of the economy of the eastern seaboard of the United States, including New York and New Jersey, by Hurricane Sandy must surely bury the fallacy that any expenditure is good for growth.

 As economist Fredrick Bastiat described in “What is Seen and What is Unseen” we can see that billions will be spent repairing the infrastructure, just to get back to the pre-destruction position. But, unseen are the productive investments foregone (machinery unpurchased and wages unpaid, for the money can only be spent once) and the goods and services that were not bought because the taxpayers’ money was spent pumping tunnels and repairing bridges. Of course, the clean-up represents a significant windfall for the contractors, but the economy as a whole has seen billions of dollars washed away. Indeed, if natural disasters were the means to economic success then Haiti would be the richest country on earth, plagued regularly as it is by earthquakes and hurricanes. And if politically motivated infrastructure projects grew economies, then Japan in 2012 would have the greatest economy in history, instead of being the most indebted in history and hardly out of recession in 20 years. 

 The same seen/unseen paradigm operates when the government spends money. The aiders and abetters of government intervention, who expect to benefit directly or indirectly from the spending, claim that taking money off savers and spending it on their behalf is for the “common good”. Crucially, what socialists (for that is what the Keynesians are) mean by common good is not the same as what the popes mean by common good when used in their social encyclicals. Briefly, to the popes “common good” means spontaneous co-operation among God-fearing men, and to socialists it means coercion, to death if expedient. 

Post-Sandy the misery of the unseen has been made manifest in 61 deaths (God have mercy on them), homes washed away, fights over petrol and people looking through dumpsters for food. Could this lesson be too big to ignore and thus be the turning point for the metastasizing state and its immoral taxation policy? ‘Fraid not – big problems need big government because we’re not capable of organising ourselves, apparently.

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From → Chapter 1

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