The Real Recipient of the Economic Stimulus?

$787 billion is a lot of money to spend. Most of us, given that amount of cash, would probably find it hard to spend the entire amount. To illustrate - I like Corvettes. They retail for about an average of $55,000 each. There are only about 27,000 made each year, though. So, if I bought every single one made this model year, I would spend about $1.485 billion (not including any discount that Chevy may give me for such a super-sized order). That would be a little less than 0.2% of the whole economic stimulus package passed by Congress last February. I could do that for 528 more years before I ran out of money. Put simply, I could buy every Corvette ever made (starting in 1953) – and still not come close to running out of stimulus money (but, boy, would I be happy!)

How big is $787 billion? Well, if someone paid you $1 million a day every day for the rest of your life, it would take until April 4165 before you collected all of the money (yes, more than 2000 years from now). Never fear, though, as I think the federal government will find a way to spend it.

Near my house, there has been some road construction going on lately. Well, that’s a little optimistic – I’ve rarely seen anyone actually working there, but there are some signs of occasional activity. There are concrete barriers and orange barrels blocking off some lanes of traffic. It’s as if they are going to do something to improve the road. But I can’t figure out what it is. Months have gone by, and my roads (what lanes have been left open) just stay the same.

Before approaching the area, from both directions, the workers installed a sign some months ago. The sign lets us know that funds from the American Recovery and Reinvestment Act are being used to implement this construction. I guess the sign is supposed to make me proud…but it doesn’t. From what I can tell, the only thing that the government is using my tax money for is to provide orange barrels, and erect a sign telling me about it.

I suppose this could be considered to be “stimulating” the economy if one were to evaluate how plastic barrel rental shops and aluminum signmakers are weathering the downturn. Hey, if you want to make a good investment, those look like two market segments whose stock should be on the rise.

I’ve said it before, but it bears repeating: the best way the government can stimulate the economy is to take less money from me at tax time, and give me the decision about where that money should be spent – rather than deciding for me. People are much more likely to consume or invest wisely on their own. We don’t need the government deciding where that should happen.

Because all I have for my tax money today is an obstacle course and some roadside reading material.

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Want to see some more government “song and dance”? Visit their Recovery.gov website to see exactly where your money is going. There is a state-by-state accounting of where the stimulus money is being spent. I must say, I tend to disbelieve much of what I see here. For example, if you hover over the state of Michigan, they will tell you that they have created (or saved!) 10,073 jobs. Um…my parents live in Michigan, and I’m pretty sure the government is stretching a truth here…..

Healthcare at the Department of Motor Vehicles?

Two weeks ago, my eleven-year-old son nearly died. Truly. One evening, he suddenly had an extreme allergic reaction and was well on his way into anaphylactic shock when we rushed him to the nearby hospital. As my wife drove him to the emergency room, his windpipe was closing, his entire body was covered in hives, and panic was beginning to show in his eyes. If this had happened one or two hundred years ago, I think we would have lost him. The very thought makes my heart ache.

Fortunately, we have a hospital only five miles away. And when he arrived at the emergency room desk, they took one look at him and immediately escorted him to a room where he received treatment. Three minutes didn’t elapse between his entry into the lobby and action to make him better. He left the hospital a couple of hours later almost back to normal. When he arrived at the hospital, there was no fuss over insurance or how much money we had with us – they just did the right thing and treated him correctly and instantly, no questions asked.

So I ask – what is so wrong with our healthcare system that we feel the need to involve the federal government into its operation?

Only three weeks ago, my family entered another lobby where we had a need to get help from the workers there, but we had an entirely different experience. Upon entering, we were told to take a little paper number from a dispenser and wait for the next available employee – even though we were the only people in the place. We sat in a chair – staring at the three workers behind counters in the room – and waited patiently until one of them advanced the number on the board and called us over. Things immediately began to go wrong, as this person informed us of some differing rules about our need – different than what we had read on their website, and different than the instructions I had been given by one of their employees at an earlier visit. The upshot was that our cost was going to be an extra (and unanticipated) $350.

As we moved to the second employee for processing, our frustration was visible. She had to know what the problem was, because she was sitting only ten feet away from the first worker. But she went about her scripted business, a little slowly, until she got to the part where the $350 issue lay. And she informed us that our original understanding was correct – in complete contrast to what the first person had said. I asked some pointed questions – the two employees shared a look – but no explanation of their disagreement was made. After signing some more paperwork, we were told to go back and wait for the third and final employee to call us forward.

So we went back to our chairs, clutching our little paper number, and watched the third employee rustle some papers behind the counter, walk around a bit, and then go sit behind a computer screen for a while. By this time, there were two or three of us in the lobby, looking at our little paper slips, and waiting for this gentleman to call us forward. When he finally did, I leaned over to all three of my children and said, “Take a lesson from this. It’s what happens when the government is put in charge of something.” Because - you may have already guessed – we were at the State Department of Motor Vehicles.

I tell these two stories for a very specific reason. When the government gets involved in something, it invariably introduces waste and inefficiency. The employees behind the counter at the DMV have very little incentive to please us or make our experience pleasant. There are no competing offices in the state to get your driver’s license – they are a monopoly. In contrast, the hospital is a for-profit enterprise. I have choices about where to take my son when he has a reaction, as there are two other hospitals within ten miles of my house, as well as numerous urgent care clinics. For some reason, when the profit motive is taken away, people tend to get lazy.

Our society seems to forget this fact sometimes. Congress is now involving itself in the regulation of executive bonuses at financial institutions and publicly traded companies, because some of these awards seem “unfair”. The government-sponsored “cash for clunkers” program ran out of money after only one week, because the feds grossly underestimated the popularity of a plan that uses taxpayer money to get people into new cars that many likely cannot afford (it’s like the housing bubble all over again – I wonder how many of these auto loans will go into default a year from now). And the car dealers in this same program are worried that they will not get the promised reimbursement from the government because the federal websites keep crashing. And you should see some of the ridiculous things that auto dealers must do to “kill” the clunkers that they receive (and essentially torpedo the used car and salvage markets at the same time).

Bottom line, I don’t want the day to arrive when I am clutching a little paper number in my hand while sitting in the lobby of a government-sponsored health care clinic, awaiting a decision and a doctor to treat my son, while he slowly chokes to death in my arms. Do you think that can’t happen? Just try asking for something quick or out-of-the-ordinary at your local government-operated Department of Motor Vehicles.

Get Out of My Wallet

$825 billion.

It’s staggering to imagine a number that high. The value is so large, that typing it out as $825,000,000,000 is too long for most printed articles, so we see it shortened into words. What other kind of everyday number creates that necessity? Think about “four”. Think about “twenty-two”. Nope – it’s far easier to type “4” or “22” than to write out the words – at least for numbers that have some meaning to the average person.

$825 billion is the amount the government is proposing for the next wave of bailout money. Add this to the $700 billion that seems to have been wasted in the first round. And add it, also, to the $1.2 trillion budget deficit that is forecast to occur this coming year. I’m going to ignore for the moment my revulsion for the leaders in Congress who truly think I will believe the idea that more government intervention is the answer to our economic woes. And I’ll set aside any arguments that I’m tempted to make about government waste and worthless spending programs – dropping billions on programs that not only are unconstitutional, but to which I am morally opposed. No, instead I want to think about one question – where does the government get $825 billion, anyway?

Three ideas come to mind. The first is that they got it from you and me, the American taxpayers. Governments are funded primarily by taxes, so to some degree, the source of this money came out of the pockets of every working American. Indeed, $275 billion of the total program is supposed to take the form of “temporary tax benefits” over the next two years. To me, this seems the same as if the government said, “Oops, we might have been taking too much money from you in taxes previously and it’s stifled your spending, so here – have some of it back.” And I have no illusions that the $275 billion that comes back started out as significantly more than that amount. The federal government isn’t known for being terribly efficient with our money.

The second place they could get such a staggering amount of money is that the government can borrow it from foreign nations. And they do. And it furthers a mounting debt obligation to those nations, putting the United States into a worsening position of weakness on the foreign markets. Will moves like this put the Chinese yuan into the position once enjoyed by the US dollar? However you view it, a foreign debt of this size weakens America in the long-term, regardless of the importance of fixing the problem right away.

The third place that our government could obtain this money is to get it the old-fashioned way – they print it. Our currency is no longer pegged to a gold standard, so the feds could print $825 billion in a matter of days if they wanted to. They could return some of those green bills to the taxpayer, and still go out and commission the construction of some new roads and bridges. But inflation would be the result – meaning that the money they send back to us would be worth significantly less than when they took it from us in the first place. Hey, government, what did you do with my money?

It’s time to stand up and say, “No more”. Government intervention has repeatedly caused economic downturns in the past. It’s the problem, not the solution. Let’s face it – would you trust the federal government to step in and run a private business more efficiently than the entrepreneurs who started it? Would Washington make a better (and less expensive) iPod every two years? Do we really think the feds will do a better job of overseeing innovations in automobiles than the free market can do?

A fourth source of the $825 billion just occurred to me – the government could steal it. But on second thought, that’s really not any different than the first source…