The Stimulus Knowledge Problem

Barack Obama seems determined to borrow and spend us to death, in an effort to appear to be doing something useful about the economic recession. And, he’s continuing the Bush administration tactic of using fear of catastrophe if we don’t immediately adopt his plan. We’re already $11 trillion in debt and he wants to add another trillion (and more each year), taking and borrowing money from people who’ve earned it in order to spend it on gigantic politically-driven projects. Much of this spending is on things he’s promised to do anyway, so he’s using our emergency as an excuse to make it easier to get a lot of his wish list at once.

The man is dangerously irresponsible.

I’m sure we’ll eventually recover despite the damage he’s going to do, but I’m still really saddened that we’ll have to endure it.

For those who may doubt that the emergency spending orgy will be bad for the country, consider these thoughts from Arnold Kling:

How many people will have meaningful input in determining the overall allocation of the billion stimulus? 10? 20? It won’t be more than 1000. These people–let’s say that in the end 500 technocrats will play a meaningful role in writing the bill–will have unimaginable power. Remember that what they are doing is taking our money and deciding for us how to spend it. Presumably, that is because they are wiser at spending our money than we are at spending it ourselves.

The arithmetic is mind-boggling. If 500 people have meaningful input, and the stimulus is almost $800 billion, then on average each person is responsible for taking more than $1.5 billion of our money and trying to spend it more wisely than we would spend it ourselves. I can imagine a wise technocrat taking $100,000 or perhaps even $1 million from American households and spending it more wisely than they would. But $1.5 billion? I do not believe that any human being knows so much that he or she can quickly and wisely allocate $1.5 billion.[GM: emphasis mine]

The government is already spending trillions each year in ways that make us worse off. He will add to that while we’re in decline.

This will surely hurt us even more.


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