It's time for a reality check ...

      George Bush had a hurricane machine
Well of course he didn’t. 

But that doesn’t stop some people from believing that he did.  Or that he had inside information on 911 prior to the attack.  Or that Dick Cheney engineered the Iraq War solely to aid his buddies at Halliburton.  

Or that the current administration is helping small businesses.  And that merely by taxing the wealthy more we can solve all our economic problems. 

People believe what they want to believe, no matter how crazy or delusional.  Especially when it comes to politics.  
  
A common mistake rational people can make is confronting the politically delusional with facts.  It’s a waste of time – like trying to teach physics to parakeets, or your cat to speak French.  Reality is an alien concept to these folks, and not particularly useful, since it threatens what they believe and disrupts their otherwise blissfully ignorant state. 

You can point out that extending unemployment benefits didn’t really help the economy, and that even with 99 weeks of UC, most people who found jobs did so only when their benefits were about to run out.  That’s all true. 

Still some people will respond that every dollar we spent paying people not to work actually generated up to $3 or more in stimulus to the economy. 

The same folks also believe Federal spending on any number of clearly wasteful and unnecessary projects -- using money that’s mostly borrowed now – is a powerful tool for stimulating the economy.   It’s a better than 3-1 payout every time. 

Really?  Can someone rationally explain how you can take a dollar from your left pocket and put it in your right pocket and it magically becomes $3 or more? 

Or how you can borrow a dollar, again put it in that magic right pocket and multiple dollars come out?  And best yet – you don’t have to pay back the dollar you borrowed? 

Bet most of us would like to get a pair of those magic pants …

It’s amazing how many people do believe this.  Which is okay; lots of people have odd beliefs and they manage to function in society just fine.  Some people believe fairies and gnomes are real – and who is to say they’re not? 

Simple logic tells you that this modern-day alchemy of turning a single dollar from the government into multiple dollars in the economy is fiscal bullshit. 

The only way this conceivably works is if the government dollars attract additional dollars from the private sector in the process.  How does that work with unemployment comp and other entitlements?  Fact is, it doesn’t. 

It’s also bullshit when cities use the same weird logic to justify squandering millions of taxpayer dollars, backed by bond sales, on new stadiums for professional sports franchises. 

How often have you heard officials say:  “We expect the economic impact on the region to be on the order of several gazillion dollars per year and provide thousands of new jobs …”

And those numbers are based on what?  More people who come to town and grab a snack before they get hosed for over-priced beers and chips topped with Cheez-Whiz?   Maybe a few more low-paid ushers and parking attendants for the games? 

Will that add a gazillion dollars of new money and thousands of jobs to the region?  Nope, unless a whole bunch or new people from outside the region come to the games.   Otherwise, you’re moving around the same amount of money typically spent there. 

And the thousands of jobs?  There will be union construction guys building the stadium – a powerful political force in many cities – and they will benefit briefly.  Yet that’s a short-term bubble; over time more dollars will be sucked out of the region to pay back bonds – with interest – that fund those temporary jobs. 

Al Gore – inventor of the Internet, in case you forgot – coined the phrase “inconvenient truth” when describing his BS about global warming. 

Well here’s the inconvenient truth that’s actually real:  Our governments at all levels are spending too much.  And the ROI on government spending isn’t that hot, despite what all the Keynesian economists say.

Want a reality check?  All you have to do is look at the number of jobs actually “created” with the billions we used to “stimulate” the economy a couple of years ago.  (The “jobs saved” was nonsense from the get-go – it only temporarily “saved” state and local public sector jobs in most cases that were eventually cut anyway.)

It often cost $100,000 or more for each job “created.”  That’s not a good deal. 

We could have cut our costs in half by simply giving each one of those people who got the “created” jobs $50,000 to spend as they wished without having to show up to work.  It would have had the same effect, without the political pandering. 

Officials can rationalize all they want about how “investing in America” with your tax dollars to build stadiums and roads to nowhere is boosting real economic output, and how extending UC and expanding entitlements really doesn’t cost you anything because of their positive effects on the economy.   And how government-funded jobs have a great payback because people with those jobs now pay taxes – as if getting back 20-30% on every dollar you send out somehow makes sense.   

It’s all just sleight-of-hand economic babble.  Spending money like this is not about boosting the real economy; just gaming the system to make it look like the economy is getting better, while paying off political allies at the same time. 

There are no magic pants at the Federal, state or local government levels. 

Just like George Bush’s hurricane machine, magic pants are a myth.