"Stimulus" spending cannot work because the government does not have any money to spend. The government can only take the money out of the economy, by taxing or borrowing. Government 'stimulus' simply puts back into the economy what the government earlier took out. This has been described as scooping water with a bucket out of the deep end of a swimming pool and then pouring the water back into the shallow end. The level of the water will not change. Keynesian economics is in error because the government has no money to spend without first taking money away from its citizens.
Furthermore, money is lost in the round-trip due to government red tape, overhead, and waste. The economy is weighed down by the burden of suffocating national debt. The private sector is disrupted and undermined, delaying recovery in the employment markets. Moreover, government borrowing depletes the supply of national capital, which would otherwise be available to invest in businesses creating lasting, sustainable private sector jobs.
Government spending is deceptive. Government bailouts and subsidies offer a seductive allure at first, yet end up being destructive and corrupting over time. It takes a sophisticated understanding of economic history to see that government spending to try to buy prosperity leads to ruin in the end.
FDR's Secretary of the Treasury Henry Morgenthau confessed that the "New Deal" was a failure in testimony before Congress on May 9, 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work." SEE Human Events and The Heritage Foundation
What would happen if the Treasury holds its "auction" of Treasury Bonds... and nobody will lend us any more money? Our entire government could collapse. Imagine no money to print social security checks, no money to pay for Medicare, no money to pay the salaries of government workers. We can no longer live on borrowed money. And I blame both Democrats and Republicans. The irresponsibility has to stop. We must reduce our debt exposure before we find that no one will lend us any more money.
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