One of the recent fads among the left-leaning commentariat is to deny that the national economy works the same way as a household budget. This is one of the cheap ways that dishonest statist economists try to get us to ignore the obvious, common-sense flaws in their theories. In fact, there is no fundamental difference. A disaster is a disaster. Every dollar used to build ray guns to fight off Krugman’s imaginary alien invasion is a dollar that could have been used for genuine production. Every dollar seized or borrowed or inflated away to pay for “stimulus” spending that goes to prop up public employees’ unions is a dollar that could have been spent or invested by the people who earned it.
Should the earthquake have been bigger? It is bigger. Outside of a few little towns in Central Virginia, the East Coast quake is insignificant. But it is dwarfed by the vast destruction of wealth caused by taxation, borrowing, and inflation to fund this administration’s failed stimulus. The essence of President Obama’s economic policy is to go around smashing people’s windows (and shattering the value of our dollars), in the hope that he can get the economy moving by stimulating business for the world’s glass-makers. Call it Earthquake Economics.
But remember the old fallacy: it’s all still a dead loss in the end, and that is why the economy isn’t growing.