Government spending often comes with unforseen consequences.  But some times we can see problems from a mile away.

Boose has asked me to explain why I am now against the “stimulus” package. The truth is, I was ambivalent about it for some time. I believe in free markets, but I still had hope that the stimulus could do some real good. I thought about the infrastructure improvements that could make this a better country to live in–these types of investments would hasten progress once the economy recovered. I thought about improving schools, making a long term investment in our youth.

But my optimism has been tempered.

I realized that the cost of this bill comes to about $2700 from every man, woman, and child in this country. And since this is all deficit spending, that’s an extra $2700 debt the next generation has before they are even born. It is hard for me to believe that the answer to a problem caused by too much debt is more debt.

But my real problem lies in the fact that our government is creating a temporary, artificial market. Proponents of the bill see this as a stopgap measure until the real market improves. However, once the money faucet stops flowing, those people involved in the artificial market will be out of work. By creating this artificial market we are stealing resources from real businesses and hindering our own recovery.

As evolution requires the death of the weak, so does capitalism. What we are experiencing now is a reallocation of labor and capital from poorly adapted or obsolete businesses to more efficient modern organizations. This is a necessary part of capitalism. The government stimulus bill will delay the process by moving labor and capital away from business to non-wealth-producing endeavors.

Another problem I have is that the bill contains buy American requirements. These protectionist policies will only make projects more expensive while propping up uncompetitive industries. This is no way to fix an economy.

My final gripe is that hundreds of billions of dollars will be going to state and local governments to fill budget gaps created by unsustainable spending. By filling those gaps we are allowing local governments to put off hard choices for a little bit longer. Or we are funding unnecessary pork projects. Either way it’s problematic.

Luckily, a third of the bill goes to tax cuts. I think a real stimulus bill should be entirely tax cuts, but 1 out of 3 isn’t terrible.

The thing is, I see what lawmakers are trying to with this bill. And I hope it works. But I’m fairly certain that it will only make things worse.

Over at Instapundit, Glen quotes:

The Obama administration has directed defense officials to sign a pledge stating they will not share 2010 budget data with individuals outside the federal government.

Which prompts one of his readers to write:

Reader Jim Menard writes: “Obama must have learned from Bush’s experience with internal opposition cells at the CIA and State Department, with their damaging anonymous leaks of sensitive information. The military certainly includes some anti-budget-cut hawks, so Obama’s move makes political sense, but if Bush had even thought about something like this, details would have been leaked to and lambasted in the NY Times within hours.”

I bring it to your attention because I think this does a nice job of showing the problem of ‘leaks’ in federal organizations. I’ve argued with several of you on this point. I think that if you are caught leaking information you should be fired no matter how important that information is in bringing to light wrong doing. If a leaker really honestly believes wrong doing is being committed, they should be willing to lose their job to reveal it. Given the administration’s decision to force individuals at the defense department to sign pledges not to leak information, Obama seems to agree with me. I wonder where my readers land on this issue now that their president has sided with me.

Additionally, I also think the comment about the NYtimes also helps illustrate how bias in the press manifests itself.

Awesome Concept. Solid Execution.

So about four months ago I was looking to buy a Dodge Charger. I came across a 2006 Charger with low mileage and cost so I seriously considered buying it. The payments were going to be about $300 a month, which at the time I knew I could afford, but was mindful of the fact that I might not be able to afford it if I went to a graduate school with a low stipend. Thus, I ultimately decided that it would be foolish to finance that Charger. At the time I was proud of myself for exercising self restraint and making the smart decision to live within my means.

Boy was I a fool!

Had I only known that Obama was going to be president I could of easily of bought that car and not had to worry about making payments. For you see, under his program, people who decided to finance things they can’t afford don’t actually lose those items. Instead people like me, who wisely decide not to spend money they don’t have, are forced by gun, to give over some of our money so that those other people can continue having things they can’t afford.

Had I been wise enough to know Obama’s policy I could of avoided being the fool forced to pay for the mistakes of others, and instead be the wise man cruising around in my Dodge charger that responsible people are force to subsidize for me.

God I feel dumb.

The Charger that Obama would of forced y’all to pay for had I the wisdom to purchase it when I knew I couldn’t afford it.

To this news:

A Pentagon review of conditions at the Guantanamo Bay military prison has concluded that the treatment of detainees meets the requirements of the Geneva Conventions but that prisoners in the highest-security camps should be allowed more religious and social interaction, according to a government official who has read the 85-page document.

I’m looking mostly at Michael who has come out rather strongly against Gitmo.

Bob Krum has this to say about why politicians are supporting the stimulus in the face of its almost certain doom:

“Why are they doing all this when they have to know that it isn’t going to work?” was the question my wife asked about the stimulus package. My answer to her: “It’s not about fixing the economy; it’s about proving Reagan wrong.” It’s about proving that an enlightened government is superior to a country led by tens of millions of individual sovereign decision makers.

While I doubt very serious Obama et al are simply trying to prove Reagen wrong, I think this is idea has a lot of rhetorical force. One might be able to build an effective campaign capable of challenging Obama in the next election by making extensive use of this rhetoric. It will be crucial to frame the argument as an elite groups of technocrats contemptuous of the notion that average American engaging in free markets principles will cause economic recovery. Framed this way, technocrats are placed on the defensive as to why their ‘education’ and ‘expertise’ are superior to ‘fixing’ the economy then simply letting the average American do the work of recovery themselves.

To reward home owners who made decisions the Jaded Apprentice has this to say:

Is this a hard thing to do? Absolutely. But the alternatives are all much worse and until now it seems this belief among the political class that their actions are not jeopardizing capitalism (because their ends are well intentioned) won’t be challenged until it’s too late. So when folks like Rick Santelli on CNBC make an understandable rant about the mortgage plan that clearly hit a nerve, you get responses like this that paint a picture of a condescending and tone-deaf Obama administration claiming we are just don’t understand their program because the ends justify their means. Bollocks. He’s administering painkillers in a way that will arbitrarily create winners and losers, rewrite the rules midway through the game, and curtail any healthy economic speculation that creates jobs and entire industries to the sidelines while we figure out how to play the new game.

Like everyone else, I’ll adjust my behavior to account for the new rules but in the mean time I’m going to be even more cautious about spending and new investment even while I consider extreme actions with my own obligations that might have been unthinkable when credit was so easy to get. The more likely the rules will change, the more comfortable the players get with pushing the envelope in ways that further stress the system. Instead of letting patience and time do their work, we add more perturbation until no stakeholder is left with hope. Eventually, desperation for stability in waters made more choppy by bad leadership enables the crowd to consider sacrifice the very essence of capitalism they used to hold sacred for the false hope of government mandated stability that has ended poorly in every society that has tried it.

Jerry Pournelle hits upon a fundamental problem of state employment.

It is essentially the way the classical political philosophers would have predicted that democracy would go. It’s not so much that the voters vote themselves largess from the public treasury, although that certainly happens; it is that those with a particular interest, such as civil servant including teachers and prison guards unions will always organize effectively while those who are affected less directly won’t, and the result will go in one direction. We’re certainly getting an illustration of that in California.

By employing a large segment of the citizenry you create incentive for those employees to politically organize so that they can protect their positions. As a result this large group of state employees are able to wield considerable power in securing their jobs even when the state faces an economic downturn. On the whole this makes government less elastic and as a result much less capable of adapting. I would full support structural changes forbiding state employees from organizing into a political entity.

The justification given for why employees must unionize is not applicable to employees of the state. Unions justify their existence as an organizational structure that protects workers from the whims of management. The idea being that since the state will not interfere with how management deals with its employees, unions force management to treat its workers fairly. However, in the case of state employees, management is in fact the citizenry. Thus, state employees already have a way of protecting themselves from the whims of management. Its called voting. If employees feel as if they are not being treated fairly by the management they can always go to the people of that government and persuade them to vote for policies that treat them better.

Since their is no reasonable justification for public unions they should be banned by law. This should give the state more control over managing its budget. However, more importantly, it will help stop the gradual process of the state becoming the primary employer of the citizenry. By making it more difficult to secure state employment indefinitely, it allows overall state employment to ebb and flow to match the times. Which diffs significantly with the current setup in which once the state acquires employees it becomes difficult to shed those jobs.

Topic for this week: Sweaters, funding science, and some other shit.