Not at all, to be honest. For starters, the very notion of stimulus violates basic economics. Taking money out of the economy and then putting it back in has no net effect. But it gets worse. Much worse.
When that money is put back into the economy, it goes to the weirdest places — $3.4 million is going to Florida to build a tunnel under U.S. Highway 27, so turtles can cross safely. A fish hatchery in South Dakota is getting $20,000 for new light fixtures. $50,000 is being spent to resurface a tennis court in Bozeman, Montana.
And so on.
These boondoggles aren’t getting nearly enough press. To help fill the vacuum, the good folks at Citizens Against Government Waste have put up a new website, MyWastedTaxDollars.org. Click on over and check it out. The best feature is an interactive map that shows just how unwisely stimulus funds are being spent all over the country.
Stimulus is worse than a zero-sum game. It is actively harmful. It is government saying that it knows how to spend your money better than you do; stimulus is the ultimate act of hubris. Kudos to CAGW and MyWastedTaxDollars.org for providing hundreds of examples of why government hubris should be replaced with government humility.
Few people outside of the DC area are likely to notice, but the recent snowstorm shut down the federal government today. Another big snow is on the way, so the feds are also taking tomorrow off.
The Washington Post reports:
Official estimate [sic] that closing the federal government for a day due to the weather costs roughly $100 million in lost productivity and opportunity costs, meaning this weekend’s storm will have potentially cost taxpayers at least $250 million, for last Friday’s early dismissal and Monday’s and Tuesday’s closures.
That is dwarfed, of course, by the opportunity costs of having a $3.8 trillion federal government in the first place. Not to mention the productivity losses.The federal government spends $49.1 billion enforcing regulations that cost nearly $1.2 trillion. if even half of that were freed up, imagine the good that would come of it.
The billions and billions of dollars spent on earmarks and stimulus would do far more good if that money stayed in the productive sector, subject to the self-correcting mechanisms of profit and loss.
In short: America benefits when Washington busybodies take a few days off. So enjoy it while it lasts.
There is great wisdom in Mark Twain’s famous adage: “No man’s life, liberty, or property are safe while the congress is in session.”
Gibbon’s Decline and Fall begins with the death of Marcus Aurelius in 180 AD. It was all downhill from there.
Besides being a well-regarded emperor who was succeeded by an ill-regarded son, Marcus was a philosopher. Reading the works of Epictetus turned him into a devoted stoic as a young man. Marcus’ book Meditations remains the sterling example of the stoic mindset: civility, moderation in all things, and above all, taking triumph and tragedy with the same quiet dignity.
Marcus also had a bit of the economist in him. Despite predating Adam Smith by sixteen centuries, Meditations contains an excellent example of opportunity costs. Only the law of demand is more important in the economist’s toolkit. As a way of saying “mind your own business,” he writes:
Do not waste what remains of your life in speculating about your neighbours, unless with a view to some mutual benefit. To wonder what so-and-so is doing and why… means a loss of opportunity for some other task.*
*Meditations, III.4; trans. Maxwell Staniforth.
Over at RealClearMarkets, I explain why the answer is a resounding no:
Rep. Phil Hare argues that “reckless deregulation” is one of the causes of the current economic crisis. That isn’t actually true. This year’s edition of the Competitive Enterprise Institute’s Ten Thousand Commandments report found that 3,830 new regulations came into effect in 2008 alone.
Over 30,000 total new rules passed during the Bush years. Hardly any were repealed. Businesses currently dole out the equivalent of Canada’s entire 2006 GDP – about $1.2 trillion – just to comply with federal regulations.
Where is the deregulation?
263,989 people make their living working for federal regulatory agencies, according to research from the Mercatus Center. That’s an all-time high.
12,190 of them regulate financial markets from Washington. More are based in New York and other financial centers. None of these figures include state and local rules and regulators. Those cost extra.
This year’s Black Friday was much more peaceful than last year’s. No tramplings were reported. There was a fight at a Wal-Mart in the wee hours, unfortunately. The store was temporarily closed, which led to this lovely scene:
[P]eople began “yelling and screaming,” pounding on the glass doors and trying to sneak into the store through the lawn and garden section. Store managers had to be sent outside to try to calm the crowd, workers said.
Which brings us to Black Friday’s most important economics lesson: not all costs are measured in money. Yes, the discounts to be had can be great. But you pay a price for them. The price can be waiting outside in the cold. It could be the crowds, the parking, or the long checkout lines. In rare cases like today’s Wal-Mart near-riot, safety becomes an issue.
Here’s an example of what I mean. Suppose the people who camp out all night end up saving $40 on their purchases. If they spend eight hours suffering in the cold, that’s a savings of only $5 per hour. Less than minimum wage. Some people don’t place much value on their time, it seems.
Or, for some people, Black Friday’s pomp, circumstance, and sales are a cultural experience. They’re worth all the trouble. For other people, they’re not. Wherever you stand, non-price costs should be factored into your shopping habits. Otherwise you just might be getting ripped off.
“Public spending is always a substitute for private spending, and that consequently it may well support one worker in place of another, but adds nothing to the lot of the working class as a whole.”
-Frederic Bastiat, Selected Essays on Political Economy, p. 16 (emphasis in original)
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