The Business of America is Business

Public spending will not restore prosperity to America if the government does not improve the business climate.

The government could build 200 lane extra hyper super duper highways between every imaginable city pair and it will not create prosperity if there is no commerce running on those highways.  You end up with square miles of concrete rotting in the sun and the politicians’ in-laws, cousins and cronies with ‘construction companies’ all basking in the tropical sun courtesy of the taxpayer’s largess.

The concrete plants that get built to pave the highways are not ‘investments in the future’ if there is no financial incentive to build buildings and other concrete structures.  The salaries of the construction workers who built the highway disappears over the horizon to buy imported goods if there are no domestic producers because they have been taxed out of existence.

The Porkulus Package (also laughingly known as the ‘Stimulus Package’) is justified because it is supposed to create and preserve jobs.  In order to have jobs, there have to be employers willing to hire people.  In order to have employers willing to hire people, there has to be some reasonable probability of making money.  Spending $Trillions on so called stimuli and then strangling the businesses that might have prospered from it is the economic equivalent of a partial birth abortion.  That is, you go through all the time, money, pain and mess to try and create economic activity, and then you kill it at birth.

Pres. Obama said that during these hard times, companies should not be looking at making profits.  (‘scuse me while I pick my jaw off the floor for the magnitude of ignorance required to make such a statement)  The recession is precisely because companies can’t make money.  If he wants prosperity (and I suspect he doesn’t, but that’s just my opinion.  I could be wrong.) he needs to figure out how to get profits rolling again.  What do they teach at the Ivy League schools nowadays?


4 comments so far

  1. LOUDelf on

    I agree that most of the package was junk. I do, however, feel that most of the infrastructure portion (the part that only the government can cover, not private enterprise) was needed. In many cases, commerce is hurt by traffic jams, bad roads that increase vehicle cost, or lack of a more direct route. Most of these projects for our roadways would allow for at least a partial fix of this, while also employing private industry to perform the work — creating jobs.

  2. way2opinionated on

    1. The infrastructure projects are being paid for instead of economic stimulus. The government is borrowing money to pay for the projects and sucking the debt markets dry. In six weeks the Democrats are getting ready to spend almost $6 Trillion. The US GDP was only $12 Trillion. They are borrowing most of the money. Where are companies going to get financing to grow or even sustain operations. And do you think the Democrats are going to go on vacation next year? They’re going to spend another $6 Trillion then, if not more.

    2. The recession was not caused by traffic jams. Fixing traffic jams will not end the recession. If public works projects are being financed in lieu of actually making the economy grow, they will be counter productive and slow the natural business cycle. That of course ignores the destruction of the business environment the Democrats are going to engage in with confiscatory taxation and soul crushing regulation. They will turn the US into a third world with a dominating patronage government pulling every string. If you look at the economic activity of third world countries, it consists of public works projects to give the appearance of economic activity (sound familiar), and crime which either operates beyond the control of the government, or is protected by it because without the criminal economy, there would be no economy at all. Welcome to Hope and Change.

  3. LOUDelf on

    You are correct: The recession was not caused by infrastructure. However, infrastructure is one area that the government can invest in where private enterprise cannot. Construction jobs have largely dissapeared. This would create a small boom, allowing some of the market to restabilize, while also getting something done for commerce — a win/win.

    Unfortunately, deficit spending is not a partisan issue. Both major parties have done this when in office, and this has caused part of the problem we’re in.

    I agree with your take on the taxation. I am in the bracket that already pays the most, and will most surely be increased by this administration as even promised in last night’s speech. I fail to see how it will help me sink MORE money into the economy…

  4. way2opinionated on

    The proper way for the government to respond to a recession is to reduce taxation to provide incentive for people to make money. It needs to unload credit markets so money is available for companies and consumers to operate. It needs to reduce burdens on business so businesses can get prospering again.

    In the early ’80s, after the Iranian Revolution and two major upsets of the oil market, and four years of Carter (the 1st incarnation of Obama) brought about a serious recession, oil exploration was one of the drivers of the recovery. Not government funded. Fed by Reagan’s tax cuts, promise of big returns (I remember the days when that was a good thing), and the freedom to do it, the economy boomed.

    The Democrats are doing the exact opposite. They are sucking the debt market dry. They guarantee higher taxes. Markets are driven by the belief in future earnings which the Democrats have promised to confiscate. And every activity which might get ready to break out and prosper is going to be drowned by a flood of regulations. The Democrats are going to create a command economy.

    Nothing is new. Everything that has happened and is happening has happened before. What is needed is known. The market knows it. It tanked this morning after Obama’s still-on-the-campaign speech. It will recover when it sees the possibility of profitability, which isn’t going to be soon.

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