Thursday, December 20, 2012

New York Times article that has annoyed me

I find this article to be ludicrous. In arguing for stimulus in preference to austerity, the article is arguing for a false economy. Where does short term stimulus take us? If it creates government jobs that are unsustainable in the long term (especially at the state level - state governments cannot sustain unaffordable jobs) and even more debt at the Federal level, then it creates a condition of false recovery hiding a deeper future fiscal retraction. The British welfare system is the central obstacle to the UK's fiscal health. It allows for a society in which the incentive to work is subordinated to the incentive to take government benefits (and not work). And what about the interest payments on debt from new stimulus? Where does that money come from. Plus, the government is not an efficient organization compared to private sector entities. Because government jobs do not exist on a predicated foundation of objective-achievement-reward, the incentive to be productive as a government worker is not in competition with private sector equivalent incentive. For a serious take on the growth of the US welfare state - see Casey Mulligan. For my thoughts on why capitalism is better than socialism  - see my article from a few months back.

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