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The federal economic stimulus program has really pumped the economy, and resulted in amazingly low unemployment rate.
Should be always run huge deficits? Will massive debt cripple the country sometime in the future? Will even bigger deficits be necessary to bail us out of the next recession? Have they gone crazy?
Historically, massive deficits have only been used to stop the bleeding during economic disasters, like Roosevelt's WPA and the Bush TARP. I think this is the first time the feds have run trillion dollar deficits during a solid economic upturn. Should we always have been doing that?
Tax cuts for the ultra-rich, aka "Trickle Down Voodoo Economics," is a very inefficient economic stimulus method. It results in an excess of cash sloshing at the top and only some of it is put to work in capital investment, hiring and wages. While the economy is somewhat improved -- maybe adding a point to GDP at most and dropping unemployment a point -- it's an incremental improvement that is costing us $1 trillion per year in deficits. It's not a good deal.
So would you support a different stimulus if it were designed differently? The current process seems to be dedicated to supporting businesses while creating hurdles for foreign suppliers, much like the Chinese or Japanese economic strategy. Their view is that if you give money to poor people, a week later they will just be poor again, and any gains will be eaten up by inflation. That's why the individual tax break is temporary, while the business tax break is permanent. If consumers don't have any more money than they ever had, it will put a leash on the CPI. The problem is that corporations have no soul. They have a limitless appetite for profits, to the exclusion of all other values.
The Western/Christian approach is oriented more toward feed, clothe and house the poor. Certainly if we spent trillions of dollars on the poor, they wouldn't be poor very long, but we would probably be faced with galloping inflation and a stagnant economy. There's also the moral conundrum that people are basically lazy. If they can get by on somebody else's dime, they will.
The big question is if a never-ending economic stimulus package is sustainable. Can we go on borrowing a trillion dollars a year, or will there be an eventual limit? A high inflation rate would greatly reduce the national debt. If interest rates continue to climb, we will reach a point where tax revenues do nothing but service interest on the debt, and the feds will have to borrow 100% of their operating capital. That puts government in the control of big money. There are those who say we are there already. Since the government controls the money, they can just inflate their way out of debt. The technique was used 2000 years ago, and is still available.
I really am curious what people think "if this goes on." Will the added wealth be good for everyone, or will the system collapse? It's not clear to me what the future holds.
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