Stimulus Spending: Who Exactly Is Being Stimulated?

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In this interview (February 2, 2009) with Jeff Crouere at Ringside Politics, we covered the benefits and costs—and especially the unintended consequences—of the government’s fiscal policy, also known as “stimulus.” There are ways that the government can raise money: taxes, borrowing, and by essentially printing the money. Whenever the government implements a stimulus plan, the money must come from somewhere or rather from some people. In What Is Seen and What Is Not Seen by Frederic Bastiat, he pointed out that whenever the government spends money to create something, we tend to see only that which was made; however, we forget about the unseen, which is what could have been made—had people not been taxed in the first place. If the money is borrowed, it must eventually be repaid (guess by whom?), and if the money is created, then we incur the consequences of inflation and a devalued currency—to name a few. If stimulus spending is viewed from the perspective of the whole United States, then we have to ask, “when you take money from people and give it to other people, then how do you benefit both of them?”

Please listen to the interview for more!

7:17 pm on October 3, 2012