In July 16 Issue
For all of you that received so much from the previous stimulus effort by our leaders in Washington, you can be thrilled there is a second one being considered.
Now, let’s see, what all did Russell County receive from the last stimulus?
Uh, what did we receive from the last stimulus?
We can’t think of anything! Announcements were made the funds for the Wolf Creek Dam were a stimulus project but in reality, it had been approved months prior.
There are a few that have paid in nothing but will get a small check, they will be thrilled, but for those that pay in a lot and get little will not be so thrilled with another stimulus.
Many will say the stimulus is not working because the number of unemployed continues to rise.
But this is really only a secondary consideration. The real reason we do not need another stimulus is because this kind of intervention inevitably does more harm than good to the overall economy, especially in the long run.
Aside from needlessly inflating the national deficit, the reality is that a connection between governmental intervention of this variety and enhanced economic performance has never been empirically demonstrated.
It has been stated that anytime the market, the natural laws of supply and demand, is artificially manipulated by the government in an effort to improve the economy, the net result is to extend the detrimental impact of the downturn longer than would have been the case without the intervention. Many claim that there is considerable evidence that Roosevelt’s New Deal policies actually lengthened the Great Depression by at least a decade.
What everyone needs to understand is that the market is essentially self-correcting. When assets such as houses are over-valued by the artificial manipulation of interest rates by the Fed, the market always compensates for this interference and eventually adjusts the assets closer to their true value.
The same is true for “stimulus packages.” While they may appear to some to lessen the pain in the short-term, their ultimate impact on the economy is negative, counterproductive and dangerous.