73 Stimulus Spending

<p style="margin-bottom: 0in;">The disconnect between how economics really works and how most people think it works is astonishing, frustrating, and sad. You cannot judge Government spending based on how a family would manage its own money because economics is not the same as budgets. Governments make an economy, Government money needs no source, and it doesn't matter what Government spends money on, it's all stimulus: Public Works are stimulus, Military spending is stimulus, even Welfare is stimulus. All Government spending is stimulus but a person's ideology determines how they want to spend the "stimulus." Milton Friedman thought dropping buckets of money from helicopters is the ideal solution, and John Maynard Keynes thought people getting paid for digging holes & filling them in again is as good as any government employment. Your ideology may vary.<br /><br />Like any system, an economy requires feedback for stability: proper accounting would be stimulus out equal taxes in. Over history, such as now, that's not always the case. If people don't think the system is stable, they mistrust it or exploit the instability, both lead to the system crashing. Since the concept of fiat currency, imaginary money, first appeared in France in the 1600s, unstable monetary systems have been crashing with some regularity due to lack of feedback. People resist feedback because, by definition, some amount of what they have is fed back into the system, and the exploiters resist feedback because they benefit from the instability. That's why artifical constraints are put on monetary supplies, like a gold standard or borrowing caps were put in place. These things aren't required for an economy, they are substitutes for feedback. Of course, feedback is the perfect solution but people don't want to pay their feedback taxes.</p>