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Source link: http://archive.mises.org/9066/obama-invents-sliced-bread-feeds-gullible-masses/

Obama invents sliced bread, feeds gullible masses

December 8, 2008 by

As social democrats we should all be outraged at Obama’s announcement this past weekend!

Why be stingy and stop at 2.5 million instead of 25 million, 250 million jobs or universal employment? Furthermore, why limit himself to a triple-digit billion dollar stimulus package when he could implement a triple-digit trillion dollar package?

Or maybe that’s his next campaign promise.

Obama can indeed create a job description and fill it with able bodied individuals. Houses can be built, schools can be repaired and highways resurfaced. These are all tangibly seen phenomena.

However, the unseen costs are multifaceted. First, to fund this Operation Mana he will have to tap into the Treasury. Unfortunately for him, tax receipts will continue to drop as the private economy is going through a self-correcting recession. As a consequence, Obama will have to resort to issuing more treasury bonds and monetizing the debt (e.g., having the Fed expand the money supply).

In short, Obama and his flock are literally digging the collective economy into a bigger hole. True enough they may be able to pay for a significant portion with Treasury sales, but in the long run that debt will have to be paid as well — plus interest.

In addition, because he is reallocating capital into relatively non-productive business models (e.g., public transportation) and inefficient industries (e.g., public utilities) any payoff will fall short of the necessary revenue needed to pay off the debt issued.

I could be wrong though, perhaps the rest of the world will continue to buy large quantities of treasury bonds. However, in doing so they would be necessarily stifling their own growth. But then again, the US treasury has already snookered the rest of the world into buying $5.3 trillion in debt; plus world stock markets soared on the news.

Will this be a new bubble?

{ 11 comments }

Arend December 8, 2008 at 6:46 am

With this much soap in the water this isn’t a question of “a” bubble, but how many bubbles. In the old days soap was discovered as being the body fat of burned corpses flowing down the river where because of before unexplained reasons the clothes washed extremely clean. Today the soap in the water causing bubbles is made of today’s and future corpses of people robbed from their wealth and property right altogether.

Bruce Koerber December 8, 2008 at 11:38 am

December 6, 2008
The Snowball In Hell Economic Proposal!

What does it look like when a high speed snowball meets a sun-baked brick wall?

The snowball looks cool! The high speed makes it sound good as it whizzes by and it looks impressive, moving fast and all!

But reality can be cruel to those who live in a fantasy world!

Not only will it smack and come to an abrupt and dramatic stop but the pieces will evaporate instantly!

Such is the fate of the fanciful lies of the ill-informed ego-driven interventionists in this remarkable period in history.

David Spellman December 8, 2008 at 12:26 pm

This is the perfect program.

Unemployed believers are shepherded into public works projects, leading to economic decline and further unemployment. This leads to the conversion of more believers who can be brought into the fold and increases the disaster and…

And then the messiah proclaims “Look at the disaster! Where would you be without my program to save you? The world is coming to an end on every hand, but you are safely in my fold.”

Pure genius.

Bruce Koerber December 8, 2008 at 12:43 pm

It is impossible for a messiah figure to be devoid of moral authority!

It is now a scientific fact that there is no moral authority for human intervention into the economy. The best first place to go to examine this scientific proof is my book entitled “MORE THAN LAISSEZ-FAIRE.”

Tomás December 8, 2008 at 4:18 pm

BK, I’m disappointed, you didn’t mention the unConstitutional coup in either of your last 2 posts. Surely you haven’t given up the good fight?

prettyskin December 8, 2008 at 7:03 pm

Good point. Why not universal employment?

nonnicat December 8, 2008 at 9:06 pm

God said in the last days we would be greatly deceived; The prophecy has to be fulfilled. Thus saith the Lord; Even so come Lord Jesus. I am not surprised by what’s happening in the world. Just read the book of Revelation it’s all written.

Fephisto December 8, 2008 at 9:21 pm

How is it like being an English-speaking person in Singapore I wonder?

Bruce Koerber December 8, 2008 at 10:35 pm

Tomas, Surely you jest!

Mike December 9, 2008 at 12:07 pm

Isn’t it true that even if foreigners do lend the US governmet the money for these projects that US export industries suffer proportionally since the dollars lent to the US govt. can’t be used to purchase US goods? If so, then even with willing foreign lenders, the US govt. can’t create jobs without destroying jobs elsewhere in the US economy.

Robert January 6, 2009 at 6:58 pm

Obama’s feeding the gullible masses as full as a Christmas turkey, all right. Too bad he’s stuffing them full with a nasty, stinky substance that shouldn’t be mentioned in polite company.

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