Kudos to Tim for providing some context on USDA’s “pork purchases.” I’ve never understood why Matt Drudge’s Web site has such influence over the Washington news cycle; he posts a few sensational links with absolutely no context, and suddenly they become the “big story” of the day. Why?
Anyway, some reporters and politicians have questioned whether spending $20 million on pork helps the economy. So just to repeat a point we made in February: All spending is stimulative. The government could buy $787 billion worth of ham, or pay laborers $787 billion to dig holes and fill them back up again, and it would stimulate the economy — because that $787 billion is still being spent.
It wouldn’t be the best use of the money, of course, but it would be stimulative spending nonetheless.
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All spending may be stimulative but at what cost? Why take $100 from a person and then pass through 50% of it in government spending and say we should be pleased? Or, worse yet, we have an administration borrowing billions of dollars and growing the national debt to create a temporary boost to the economy. The fact is it would be MOST stimulative to permit taxpayers to keep their money and spend it as they choose. TAX CUTS are proven to shorten recessions.
The other point with exposing the money spent by the USDA for ham is that it really doesn’t do anything to create jobs. That was supposed to be the #1 priority of the stimulus package. Trusting the government is risky and trusting it with our earnings and our children’s future earnings is unproductive and will certainly create a far worse crisis in the near future.