One of my liberal friends e-mailed me today poking fun at the GOP’s gripes with the government “stimulus” bill.  (The “stimulus” bill will hereinafter be referred to as The Pig Bill because it is nothing more than a pork-filled, spending bill with the goal of growing government.)

In his e-mail, he copied and pasted the items in The Pig Bill that Republicans identified as waste and requested to be removed.  Among the items listed were:

• $448 million for constructing the Department of Homeland Security headquarters;
• $248 million for furniture at the new Homeland Security headquarters;
• $600 million to buy hybrid vehicles for federal employees;
• $400 million for the Centers for Disease Control to screen and prevent STDs;
• $75 million for “smoking cessation activities”;
• $150 million for Smithsonian museum facilities;
• $75 million for salaries of employees at the FBI;
• $6 billion to turn federal buildings into “green” buildings;
• $1.2 billion for “youth activities,” including youth summer job programs; and
• $5.5 million for “energy efficiency initiatives” at the Department of Veterans Affairs National Cemetery Administration.

There was much more, but why waste time listing further examples of government waste?

Before listing these items, my friend sarcastically wrote, “[W]hy is it that I find almost everything on this list . . . to be a great idea?”

That’s easy.  He’s a liberal, and liberals can’t comprehend the true nature of an economy.  When liberals want to “jumpstart” an economy, they think government should not only play the lead role, but that it should be the sole player in the process.  Liberals believe that an economy can be centralized and managed from above. 

Definition of “Economy”

The inherent nature of an economy, however, undermines that very philosophy.  By definition, an economy is “the management of the resources of a community, country, etc., esp[ecially] with a view to its productivity,” “the prosperity or earnings of a place,” and “the disposition or regulation of the parts or functions of any organic whole.”

Any one of these definitions rests on the concept that an economy consists of people.  The “resources of a community” belong to people.  The “prosperity or earnings of a place” refer to the profits and earnings of people.  From any perspective, an economy consists of people engaging in exchanges of all types in order to achieve their wide-ranging goals.  In the case of the United States, our economy consists of 300 million people.

An Economy Cannot Be Managed From Above

Because an economy consists of the inner-workings of millions of individuals, it cannot be centralized or planned from above.  The individuals and businesses that make up an economy all make decisions regarding their exchanges based on any number of distinctive factors, including business practices, motives, risk assumption and aversion, goals, expectations, and beliefs.  These decisions, exchanges, and factors form a complex system that takes on a life of its own.  

Any attempt at transforming or “jumpstarting” an economy via government intervention (e.g., The Pig Bill) is downright arrogant because of an economy’s inherent complexity.  Managing an economy means managing people.  When government intervenes (usually unpredictably), it affects business confidence and motives.  The freedom and predictability that formerly marked an economy lapse into fearful uncertainty.  Businesses and investors no longer take risks because of the unpredictable effect of government action on their profits and productivity.

The Pig Bill is based on one thing: spending money the government does not have.  History has already proven that spending money to jumpstart an economy will not lead to recovery.  In fact, it impedes recovery and prolongs the pain (e.g., The New Deal). 

Spending $800 billion requires printing more money, borrowing it, or raising taxes.  Any of these scenarios dilutes or decreases private investment (whether via taxes or inflation).  Instead of allowing the private sector to purge itself of the excesses of previous government interventions that led to this financial crisis and reinvigorate itself through new innovations and wealth-creating business models, investors and businesses will withdraw and hold back due to fear that The Pig Bill and other government meddling will undermine their productive efforts.

The blueprint for reforming or jumpstarting an economy is no secret.  Get the government out of the way.  Lower taxes and less burdensome regulations allow the people to save, invest, and prosper.  And when people prosper, the “economy” follows suit.   

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