The Redistribution of Debt
The rich get richer and the poor get poorer. It’s a saying as old as history, and just as toxic. It’s misled millions to believe they’re doomed to poverty and that wealth is just an elusive dream for a select few. But the 2008 Economic Stimulus package may help put us all on equal footing. By ensuring everyone experience poverty through massive inflation.
Both Democrats and Republicans are in favor of the plan. The proposal would pay up to $600 to individuals, married couples up to $1,200, plus $300 per child, and even many who don’t earn enough to pay taxes, can receive up to $300. The total plan will cost an estimated $150 billion dollars. But despite it’s good intentions, the program may turn a mild recession into a full-blown one, or worse.
There’s only three ways it can be paid for: taxes, new currency or credit. Through taxes, while it would force government to cut spending in the short term, which is a good thing, there’s no doubt taxes will be raised in the long run to compensate. If it’s paid by printing new currency, the dollar would definitely devalue even further and our current inflation would spiral out of control. But the real problem is credit. By merely tacking it onto the national deficit, which is currently at $9 trillion, it will still devalue our dollar with taxpayers footing this seemingly endless debt.
There’s no doubt spending stimulates an economy. It was lack of spending which fueled the panic from the 1929 Stock Market Crash into the Great Depression. Which is why it’s ironic to hear those who at one time swore the “trickle down theory” only benefited the wealthy, are now clamoring for the potential spending behind the stimulus package. Some, such as the AFL-CIO Labor Union, claim it isn’t enough.
But spending on credit, especially amounts that can’t be realistically paid for, creates serious problems. After all, that’s what got us here in the first place thanks to the subprime mortgage crisis. This is why the Economic Stimulus package is nothing short of a welfare handout. Simply giving money away and conditioning people to an entitlement mindset every time they make mistakes will never address this fundamental problem.
And deficit spending by a government comprised of career politicians who believe they can manage our money better than we can, creates disastrous results. Especially when they simply take our money out of one pocket just to put into the other. Minus inflation no less, not to mention compounding interest. That’s not even the redistribution of wealth. It’s the redistribution of debt.