Don't Make It Hurt

Monday, March 2, AD 2009

So here’s an argument against irreducible complexity.  Take a family that works hard for a living, saves a large chunk of its earnings for old age, emergencies, sending kids through college, and so on.  Then create (through some combination of amino acids and other proteins) an institute that offers insurance against disaster.  The family, being prudent, realizes that the insurance, while it costs them a little more each month, could potentially save them thousands of dollars in the long run, and so it buys into the insurance company.  Now introduce a mutation: the family decides that since disasters are covered, they can divert a little more money into luxuries. Repeat this process with a health care institute that helps cover the soaring prices of medication; a loan agency to cover college tuition (which is steadily outpacing what the normal family can afford); a loan agency to cover the cost of a business; a house; a car; anything at all with the swipe of a plastic card with a magnetic strip.  With that final mutation, we now have a system in which the removal one component causes the whole organism to fail, and yet was built up by increments.

Nearly half a year after the great crash that marked our current recession as one of the worst in decades, we are still bleeding.  Our economy continues to shed jobs; the stock market wavers, falls, stabilizes, wavers, and falls again; big businesses, like the insurance titan AIG, continue to need billions of dollars of bailout money just to survive; and the government continues to scramble to pass legislation that supposedly will fix all our problems, but in reality will simply make matters worse.  The gigantic stimulus package was laughable (in more a mad, gibbering, hysterical laughter than a ha-ha laughter) in that hundreds of pet projects suddenly found funding, but precious little in the bill actually targeted economic stimulus, and much of the spending won’t happen immediately.

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Does It Really Stimulate?

Thursday, February 12, AD 2009

It seems a bipartisan effort to ensure that there is some sort of stimulus bill, and only a few politicians think there should be no package at all.  Many economists have warned in the past, and continue to do so now, that stimulus packages like the one currently waiting final approval, do not work.  Let’s take a moment and examine the arguments as to why they don’t work.

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2 Responses to Does It Really Stimulate?

  • The Porkapalooza Bill is a classic example of the foolishness in this phrase- Don’t Just Stand There Do Something. It represents everything that the Washington Elite in their heart of hearts have wanted to inflict on their fellow Americanos since well nigh 1933. All in one big lovavble pork-filled sausage casing. Do not think many of us in PA will forget seeing GOP Senator Arlen Specter snuggling up to Dingy Harry Reid in the announcement of Pork In Our Time. At same time- except for mania for infrastructure- don’t see how state and local governments will receive help from Porkapalooza. Philly Mayor Michael Nutter told his top managers to give him three cost-cutting scenarios each- bad, really bad, and Oh My (will not break 2nd Commandment on this blog.) Meaning- up to 30 per cent budget cuts across the board. Including a possible 2000 or more police officers turning in badges. PA Government may or may not be in dire straits- we may not know until the annual late-June early-July kerfuffles between Gov. Fast Eddie Rendell and wascally Wepublicans(according to PA MSM, of course.) Meanwhile I hope to promote cousin Edward for Sen. Specter’s seat- devout Catholic, ethical lawyer, doting father of 2-year-old Katie, makes me look like a flaming liberal. Until then, we shall hold and roll.

  • Gerard,
    If I have any money left after being forced to subsidize abortion and welfare, I will donate to your cousin’s candidacy.

Obama and the Stimulus Package

Tuesday, February 10, AD 2009

Has anyone ever wondered if it is possible that one can land in a financial crisis when one has a steady income, no debts, and a large reserve of money in case of emergencies?  Certainly, I suppose, if something devastating comes around, like an accident that requires weeks in the ICU, surgeries, and a long rehabilitation, that could bankrupt a person.  Yet such accidents, on a whole, are rare, and most people who live a financially responsible life never have to plead for a bailout.

When we look at our current financial crisis nationwide, I can’t help but wonder what people are thinking.  President Obama has promised us trillion dollar deficits for years to come in an effort to restore our economy.  Like most right-leaning folk, I’m under the impression that our current crisis has come from overspending, living beyond our means, and not being prepared for when we hit bumpy times in the economy (like $4/gallon gas, which drives prices up all around).  Perhaps, if this view is incorrect, someone will be willing to explain to me why it is so.  But my impression has been that first, people individually are consumed with buying, buying, buying, even when they don’t have the money to buy.   I have friends who, though they grossed over $60,000 a year, were still living paycheck to paycheck because of their deficit spending.  I’ve seen people who, upon receiving their government money, have gone and blown it on new cell phones (that are shut down after two delinquent months), on fancy steack dinners, and so on, instead of buying necessities or saving up what they can.  I’ve seen people struggling with hundreds of thousands of dollars of accumulated debt that came from student loans, house loans, car loans, credit cards, and so on.  This is just what I’ve seen.  What I’ve heard–word of mouth, or in the news, or on blogs–is even worse.

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18 Responses to Obama and the Stimulus Package

  • My personal feeling is that the dollar will die within the next 10-15 years. I just don’t see how it can survive all these pressures of printing and borrowing in order to pay for entitlement programs and foreign interventions.

    If Obama were really interested in rescuing the economy and preserving the nations ‘greatness’ while there is still time he would:

    1.) End our overseas commitments, whose cost is perpetually skyrocketing to the detriment of our blood and treasure; not to mention the liberty of those we are trying to “help”

    2.) Audit the Federal Reserve if you aren’t willing to abolish them. The Fed is a quasi-public/private cartel of banks that has control of our currency via manipulating interest rates. Who the hell are they to arbitrarily decide the price of money? Our fiat currency had been far too politicized, thanks to the removal of any kind of commodity standard. We need to know what the Fed has been up to in total. Its way past time Congress reassert its powers and responsibilities.

    3.) Create a long-term transition away from entitlement programs. It turns out the Great Society ain’t so great. While many people are now dependent on the state to survive, the costs we could save from ending foreign commitments could be moved towards these programs as we slowly close them down over time. Congress should be barred from raiding Social Security/Medicare and Medicaid funds for their pet projects.

    4.) Elimination of the Income Tax. The government could easily put money back in the hands of consumers instantly by simply not taxing the fruit of their labor. There are plenty of other tariffs and taxes that would maintain the size of government at about the level it was in the Clinton years. If you have to institute a consumption tax, fine… but it should eventually be phased out too.

    5.) Secure the border. If the Defense Department really needs something do, why can’t they defend our federal border from rampant illegal immigration? Immigration, particularly of educated individuals is crucial to our society’s resources, but that is a far-cry from the seemingly endless free-for-all occurring on the border with Mexico. If the Mexican government were ever to collapse, the U.S. has to be able to preserve its physical integrity. Entitlement programs in medical care and education that have an effect of subsidizing illegal immigration should be ended.

    6.) Allow the liquidation of assets to occur. If the banking industry, real estate industry, auto industry etc. don’t fail how can we ever rebuild on a better footing? We have to discover the price of their assets by rewarding the people who have saved their money. They are the ones capable of bringing on a genuine recovery and moral redistribution of wealth. What is occurring now is an attempt by the elite and politically-well connected to keep the status-quo afloat at the expense of taxpayers and responsible consumers. This process will undoubtedly be extremely painful. But quick and painful is preferable to slow and painful.

    The fact is for the last few decades we’ve been living in a fantasy world of cheap money, easy credit and an entitlement mentality. Thats NOT what this country was ever supposed to be about. We’re supposed to work towards lifting ourselves up so that the next generation could go even higher. Instead we chose the pleasures of today at the expense of tomorrow.

    We aren’t the first generation to ever act this way. Its something that can be forgiven and reversed if we are willing to endure the consequences of our bad decisions. There’s no easy or popular way out. Its time to freaking man-up and deal with it.

    At least thats the way I see it.

  • I’m usually just a lurker here and love The American Catholic writers and the in depth dialogue here – Thank you. … I can’t help myself in making this point to enough people… I believe the goal of Obama and whoever is behind him is to destroy this country and maybe that just means Democracy but I can’t help think it also includes Christianity.

  • Lee,

    I really hope you’re wrong.

  • I think it is inappropriate to accuse the President of wanting to destroy the country. After listening to similar accusations from Bush-haters for the last eight years, I think those on the right should be especially sensitive to this.

  • I don’t believe that the President intends to destroy this country. I think he sincerely believes that unprecedented deficits that our descendants will never be able to repay, an ever-expanding public sector, and enhanced government regulation are the path to prosperity. Truth to tell I would have more intellectual respect for the President if I believed that he did wish to destroy the country, instead of accepting the fact that he actually believes this snakeoil.

  • Lee,

    I would also caution against spreading that speculation. I’m more in the camp that Obama and his ilk are plunderers (cf Ayn Rand’s Atlas Shrugged), and they simply think they can keep plundering the wealth accrued by our hard-working, industrious citizens indefinitely.

    Part of the problem is that there’s a disconnect between viewpoints on the right and the left. The ideas of how economics work, how to stimulate job growth, how to make sure everyone has his needs met, are so divergent there is simply no middle ground to work with. To this extent, both sides see the other as being completely disassociated with reality. Frankly, I believe most of these people who are willing to plunder our nation–and they are on both sides of the aisle–are the ones who are truly disconnected with reality. The plundering occurs to score political points, and those points continue to put a person in power.

    Now, I don’t really see what Obama gains personally by being president, except that he gets to be the one directing the course of the nation. Now, most people are drawn to one party or another because they believe that party has a particular vision that agrees with their own view (even if that party hasn’t held that vision since 1960). I think Obama truly believes there are huge injustices working in our nation. Ask any Democrat, and you’ll get that kind of response. In some cases, those injustices are completely valid, and Republicans are remiss in failing to address them. In other cases, those injustices are trumped up, or are infantile railing against the natural order of the world. But just because they’re trumped up doesn’t mean that the person advocating fixing those injustices knows it.

    Consider the plight of having extremely wealthy and extremely poor in our nation (though, arguably, our poor are wealthier than most “wealthy” in many third-world nations). Democrats view this disparity as coming from free market economics, a system that plunders the poor for the advantage of the rich. (I’ve argue long and hard with my sister on this point, and she won’t budge an inch on the denunciation of capitalism as personified by the industrial giants of the late nineteenth century.) Republicans view the disparity as being derived from government interference, whose subsidies and favoritism to lobbyists create situations and loopholes that permit the plundering to occur. I believe the disparity comes in part because the free market permits people to get rich by working hard (and often being in the right place at the right time), and permits people to be destitute by not working hard, or having the wrong ideas, or being in the wrong place a the wrong time. But I also believe that governmental interference with the markets by and large has permitted the grossest of injustices to occur. So when I see someone calling for more governmental oversight, more governmental interference, more governmental control, I cringe and feel that the person calling for this is either off his rocker, malevolent, or making power plays.

    But you have to understand, that someone working with that opposite viewpoint things the same about me when I call for deregulation, for tax cuts, for more faith in the market, and so on. When Obama speaks about the “failed policies of the past eight years”, I really think he believes what he says. That doesn’t mean he isn’t flat out wrong, but I think he’s honest about it.

    But I also think he is plunderer, in the sense that he feels the hardest working and most successful have an obligation to subsidize those who aren’t as successful. Now, Catholics believe that a man’s excess wealth should by right be accessible to the poor, but that can be accomplished in more ways than just handing money out. But there’s a big difference between believing there’s an obligation on the part of the rich to help the poor, and believing that a person can only be rich at the expense of the poor, and therefore should have his possessions forcibly confiscated and returned to the “rightful” owners, which I think Obama believes.

    Have no doubt–I believe Obama’s economic policies will do much to ruin our nation. But I also believe he feels he’s doing right. But then, I believe no one willingly does evil. They simply convince themselves that what they want to do is good, and then feel justified in what they do.

    Of course, you could argue that Obama sees the destruction of this nation as a good he is fighting for, but I don’t think there’s much justification for that.

  • “Catholics believe that a man’s excess wealth should by right be accessible to the poor…” – Ryan Harkins

    I disagree. I do not have such a low opinion of Catholics as to believe that Catholics approve of envy, theft, and ingratitude.

  • Micha Elyi,

    Of course Catholics do not approve of envy, theft, and ingratitude. The principle I’m referring to is when a man has more wealth than he needs, and the poor person does not even have the essentials for survival. The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without. The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    The problem that we face is how much wealth one can possess before any more is truly excess, and how little one can possess before it constitutes to a desperate situation that permits the usage of another’s goods in order to survive.

    Context, Micha Elyi, should help resolve what I’ve said with what the Church teaches.

  • This stimulus plan is the old “wrong execution of the right idea”. The
    righy idea being something is needed to “kick start” the economy after a
    brutal loss of confidence. But piling on more debt after execessive debt will
    not work anymore than giving a heroine addict more heroine.

    We must do what Kennedy and Reagan did. Cut Taxes!

  • Ryan,

    The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without.

    I think you’re comparing apples to oranges here. It is precisely because we have a right to private property, that we have a moral obligation to work towards the common good.

    The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    The problem that we face is how much wealth one can possess before any more is truly excess

    In our economy, the excess wealth is that which one keeps in one’s mattress, or uses to buy yachts. Funds invested in the markets, bonds, treasuries etc. is not excess, it is actually “working”, it is providing the needed capital for job creation, manufacturing needed goods, and in fact funding social programs. There is such a thing as excess consumption. The beauty of the fair tax is that it taxes consumption, not wealth.

    and how little one can possess before it constitutes to a desperate situation that permits the usage of another’s goods in order to survive.

    If they have cable TV, DVD, a car, cell phone, MP3 player, etc… then… I submit that their situation is not so desperate.

  • Good post, Matt. I would add that a free society means that one is free to behave selfishly. The miser who shovels wads of money under his mattress and the big spender who buys more houses and yachts than necessary are both guilty of being uncharitable, but that does not give the state the right to take their property away. Characters like Paris Hilton can momentarily make a Marxist out of even me, but then I remember that there have always been rich people who choose to lead selfish and self-serving lives. They will be judged, just as the rest of us will be.

    If charity is forced, it is not a virtue. And you are perfectly right that the state is not in the charity business, but in the business of expanding itself.

  • Donna V.,
    I would add that a free society means that one is free to behave selfishly.

    Quite right, I meant to be suggest that, to the extent that the state is obligated to provide for the common good, that it should be funded from excess consumption rather than by reducing the capital which is the engine of the economy.

  • Matt,

    I think you’re comparing apples to oranges here.

    Hardly at all. The crux of the question is how much wealth is enough, and how much is too much (or excess)? At what point does a person have so little that he has a right to appropriate my property in order to survive? Private property and working towards the common good go hand in hand. The common good upholds the notion of private property (for a variety of reasons, like making our work fruitful, like providing for our individual needs so as not to be a burden on others), but that does not mean that private property is inviolable, either.

    But keep in mind that you’re making way too much out of my statements. I’m not in the slightest an endorser of the massive lot of entitlements the government keeps handing out. What I do endorse is understanding two things. One, we Americans have by far more stuff than we need. Just think of all the things that you could do without (and maybe should, since wealth has this nasty tendency to get between one and God (cf Luke 16)). Two, while investments are good long-term strategies for both making sure one is provided for in old age and providing jobs for people, there are plenty of people who need some short-term solutions just to make it to the long-term solutions. I would hope that these are apparent. The question then is: how do we best help those who truly need an act of charity to make it through the day?

    The Catholic church does not approve of theft, and many of the arguments we tend to have concerning social justice is whether, say, governmental taxation and entitlement programs are thinly disguised theft, or if they are true genuine charity, the option that is least bad for helping the poor.

    While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    Keep in mind I just stated what the dilemma was here, and not a solution. You have proffered an understanding of the government that bars any true charity in governmental acts. I would counter, reluctantly, that the government is made up of people who are capable of charity, and who often enough believe that passing laws to force others to subsidize the needy is the only way to provide aid. But I say reluctantly, because Donna states it correctly when she says: If charity is forced, it is not a virtue. But you have to understand where the supposed charity theoretically lies in the case of the government–it is supposedly (and I say supposedly because too often I feel the government entitlement programs have nothing to do with charity, and everything to do with political power) on the side of the government officials who are wresting the money from one person to another. The absence of charity is, often enough, on the part of the tax-payer, because their tax dollars are an obligatory contribution, not a gift.

    Of course, if we look at charity–the love and willingness to give of oneself for another (even a stranger) because of one’s love for God–then we see that the government official fails in part because the wealth is taken from someone else, not the official. But then, you have to understand that a case could be made that the government official’s giving of herself is the giving of her time and talent to craft those laws that wrest the money from the rich man and redistribute it to the poor.

    Now, if it seems that I’m wishy-washy here, or waffling, or whatever, it is because I’m just writing arguments. I’m not arguing one side or the other; I’m merely presenting other factors to consider. I don’t think my case for the charity of the government worker is at all compelling, but it is an argument that can be made, and to someone in power, is a good justification for enacting massive entitlement programs. (That whole fallen nature thing I’m sure comes into play somewhere around here.)

    If you want my honest opinion, it is that most government entitlement programs enable sloth, breed envy, and in general make the situation worse. The principle of: if you subsidize something, you get more of it is at play. Sometimes love for our neighbors has to be tough love, but the only way to know if that is the case is to be intimately involved with our neighbors.

    Just some things to chew on.

  • Ryan,

    Ryan:The right to private property does not outweigh the obligation to work towards the common good, especially when one can deliver needed sustenance to those who would perish without.

    Matt:I think you’re comparing apples to oranges here.

    Perhaps I’m misreading, but in my understanding you are comparing the right to private property with the moral obligation of that owner to give of his excess to support the poor. The first is a right, the second is an obligation which flows (at least in part from the right), it is not a question of one outweighing the other.

    But keep in mind that you’re making way too much out of my statements. I’m not in the slightest an endorser of the massive lot of entitlements the government keeps handing out.

    I recognize this, just seeking to clarity.

    What I do endorse is understanding two things. One, we Americans have by far more stuff than we need. Just think of all the things that you could do without (and maybe should, since wealth has this nasty tendency to get between one and God (cf Luke 16)).

    Absolutely, and with regard to “stuff” this is exactly the argument in favor of the fair tax, which targets stuff.

    Two, while investments are good long-term strategies for both making sure one is provided for in old age and providing jobs for people, there are plenty of people who need some short-term solutions just to make it to the long-term solutions. I would hope that these are apparent. The question then is: how do we best help those who truly need an act of charity to make it through the day?

    Principally by letting those who have a right to those investments determine what portion ought to go to charity, it would be for God to judge them on their culpability for letting greed interfere, secondarily, by the state acting as an emergency backstop to take by compulsion what it is absolutely necessary (all the better based on consumption rather than income)

    Matt: While the state has an obligation to insure the barest needs of the poor are met, even when the state does step in, it is not out of charity in any Catholic sense. The state is incapable of theological virtues as far as I understand it.

    Ryan: You have proffered an understanding of the government that bars any true charity in governmental acts. I would counter, reluctantly, that the government is made up of people who are capable of charity, and who often enough believe that passing laws to force others to subsidize the needy is the only way to provide aid….The absence of charity is, often enough, on the part of the tax-payer, because their tax dollars arean obligatory contribution, not a gift…a case could be made that the government official’s giving of herself is the giving of her time and talent to craft those laws that wrest the money from the rich man and redistribute it to the poor.

    Excellent! This is the sort of precision I like (I recognize that you aren’t agreeing with these arguments).

    1. government people are capable of charity – absolutely
    2. government people believe that taking from the wealthy to give money to the poor is charitable – absolutely, but they are in complete error on this (the crux of my opposition)
    3. government people are charitable when they give their efforts to taking from the wealthy – they are in error, particularly when they are paid, it increases their power or furthers their ideology. They may be charitable to an extent when they give of themselves as part of their work to aid the poor, and/or they sacrifice potential for private sector wealth by working for government (great distinctions have to be made here, as this may be exceedingly rare).

    My definition of “government people” extends from legislators, to employees of government and non-governmental organizations (as well as those who support such) who’s practice it is to expand the role of government.

    If you want my honest opinion, it is that most government entitlement programs enable sloth, breed envy, and in general make the situation worse. The principle of: if you subsidize something, you get more of it is at play. Sometimes love for our neighbors has to be tough love, but the only way to know if that is the case is to be intimately involved with our neighbors.

    Amen! The amazing thing is that true Charity has a much better impact on the reciever and the sender because it is not seen as an entitlement or taking but a gift of love.

  • Matt,

    Just to clarify:

    Perhaps I’m misreading, but in my understanding you are comparing the right to private property with the moral obligation of that owner to give of his excess to support the poor. The first is a right, the second is an obligation which flows (at least in part from the right), it is not a question of one outweighing the other.

    I’m viewing this more as a weighted scale than a comparison. Our first obligation is to take care our of ourselves, and we are not called to give charitably when doing so harms our ability to survive. But as we accrue more wealth, the possibility of a contribution harming said survivability decreases, and eventually vanishes (save for being stupid about it…). At some point, we have so much (think scales dropping well below the equilibrium point) that we have a graver obligation to use that wealth for the benefit of others than for our own concerns.

    So it really isn’t comparing two unrelated objects (in my mind, anyway), but trying to determine where the tipping point comes, and what should be done when the scales tip.

  • Ryan,

    Our first obligation is to take care our of ourselves [, our families and those we have a special obligation to], and we are not called to give charitably when doing so harms our ability to survive. But as we accrue more wealth, the possibility of a contribution harming said survivability decreases, and eventually vanishes (save for being stupid about it…). At some point, we have so much (think scales dropping well below the equilibrium point) that we have a graver obligation to use that wealth for the benefit of others than for our own concerns.

    Now we’re on the same page, the apples-apples is obligations, to our own vs to others. I agree completely. Of course, using our wealth for the benefit of others is not necessarily direct help for the poor, it can include hiring workers or investing in businesses that do so.

  • using our wealth for the benefit of others is not necessarily direct help for the poor, it can include hiring workers or investing in businesses that do so.

    I might add, that growing our business is not charity, even if it helps others. No matter how many people we help through employment, we have a serious obligation to direct charity.