Christopher Grey is CFO and co-founder of CapLinked, an online platform for connecting entrepreneurs and investors. He was a senior executive and managing partner in private equity, finance and banking for 15 years and directly involved in the origination and management of billions of dollars of debt and equity investments in various industries. He founded Crestridge Investments and Third Wave Partners, and was managing director of Emigrant Bank, the nation'sMore ↓Less ↑
Many liberals, Democrats, socialists and even some allegedly serious economists keep insisting that the way to revive the economy is not tax cuts, but more government stimulus spending. They say we can’t afford to keep taxes low, but we can afford and even desperately need more government spending.
Even though this position lacks any basis of historical support and defies market economics, this aggressive group of diehard government stimulus supporters refuses to back down. Even though Japan has spent itself into a 250 percent of GDP national debt with this strategy and failed, they still won’t back down. Even though there is no logic to the idea that taking money from the private sector and funneling it through government bureaucrats will create economic growth, they won’t back down.
Now, there is evidence in Los Angeles as to just how extremely ridiculous the position really is. Per an audit, Los Angeles spent $111 million of stimulus money to save only 55 jobs. That is $2 million per job.
This is not some right-wing conservative group doing the audit. This is Los Angeles itself doing the audit. L.A. Controller Wendy Greuel said this about the job numbers:
“I’m disappointed that we’ve only created or retained 55 jobs after receiving $111 million in stimulus funds,” Greuel said. “With our local unemployment rate over 12 percent, we need to do a better job cutting the red tape and putting Angelenos back to work.”
Is that so, Wendy? Thank you for that highly educational economic assessment. Nationally, there are at least 20 million people unemployed. To put half of them back to work and return the unemployment rate to a normalized level of around 5 percent using money as efficiently as Los Angeles used the stimulus, we would need $20 trillion of government stimulus spending.
That is not a typo. Put into perspective, that amount of stimulus spending is equal to about one and half times the size of our entire $13 trillion American economy. We do not have anywhere near enough money in the country, nor will we ever, to spend via government stimulus to create enough jobs at this rate to put very many people back to work. Getting beyond the absurdity of the numbers involved here, what does this really mean?
For all of you socialists, liberals, Democrats, and those who are otherwise mentally challenged or living in a severe condition of denial or detachment from reality, it hopefully should make you understand that government stimulus spending does not work. It cannot work. It never will work. It never has worked. Are you getting the message yet? Would some electroconvulsive shock treatments possibly help you to recover from this delusion you have that government spending somehow creates economic growth? Yes, Paul Krugman, I’m talking to you.
All government stimulus spending does is help politically connected private and public sector vested interest groups feed at a bigger trough and gives taxpayers the shaft even more. It does nothing more and nothing less. That is reality. Face it.
Here’s a more serious question. Regardless of your politics, is there really any sane and mentally competent person who would want to pay taxes for this nonsense in the face of so much evidence that the money is being flushed away on basically nothing? Even if you are a hardcore liberal, you should be appalled by this waste of money by your corrupt and incompetent government that is run entirely by the liberal Democrats you elected. Here’s why liberals especially should be mad about this.
Think about how many homeless people you could house for $111 million. You could have given 740 homeless families a free and clear $150,000 home or condo. Or, you could have paid rent for 1,156 families at $800 per month for 10 years. Instead, your government, according to its own audit, created a pathetic 55 jobs.
How many children could you feed for $111 million? You could feed 3,083 children at $3,600 per year for 10 years. How many college scholarships could you give for $111 million? You could give 2,775 full four-year college scholarships of $40,000 to deserving students.
Are you feeling guilty yet? Are you feeling stupid yet for supporting these so-called liberal politicians? Are you really going to vote for the same lying, corrupt, incompetent charlatans who are spending money this way? If you are, do you have any brain activity at all? Or will you just vote for anyone who supports high taxes, high government spending, lots of regulations, and says things that make you feel good about yourself for being so enlightened, smart, and altruistic?
As for the Paul Krugman, Nancy Pelosi, Harry Reid, Larry Summers, Tim Geithner, Barack Obama, and others who still think taxing the private sector or borrowing more money to increase the size of government is the way to create economic growth, they’re starting to look and sound more and more like Baghdad Bob every day.
For those of you who don’t remember, Baghdad Bob was the guy who worked for Saddam Hussein and kept insisting that Iraq was winning the war. To some on the extreme left, maybe they think Iraq did win the war. If they still can believe government stimulus is a good way to create jobs or economic growth, they can believe anything.
Maybe the solution to the housing slump is getting all of these economically illiterate and spendthrift liberals to shell out their own money to buy all of these vacant houses that nobody else wants to buy. It’s worth a shot.