My Stimulus Plan

I agree with you regardless of the endless hours watching Lou Dobbs (when in Rome do as the Romans do).

Two questions:

Please explain "sound money".

Free trade yes; but how do you get others to participate in free trade (end subsidies, better working conditions, etc...)?

Thank you...

Great point as usual, Dr. Boudreaux!

Did you see this in today's WSJ?

Bill Gates Issues Call For Kinder Capitalism


http://amateureconblog.blogspot.com/2008/01/bil...>

I don't get it. Bush made huge tax cuts 7 years ago and we've been "freeing" up trade with all kinds of agreements and here we are held up by rickety stilts the Fed has placed. We're supposed to do more of the same?

I wouldn't expect Muirgeo to "get" the protracted period of economic growth we've enjoyed this decade, nor the necessity/inevitability of cycles in the economy to refocus us on true productivity (I love the "tide going out" metaphor...)

PS - Canada "enjoys" an unemployment rate a full percent higher than ours, and they regard that as "good times"!

True_Liberal,

No maybe I don't. Are you telling me the current "growth" is better then when after Clinton increased taxes? Why is it not rational for me to question the assumption?

OOPs. That link is ;

http://www.academycomputerservice.com/economics/charts.htm

Make sure there is no backslash "/" at the end.

Don, I hate to pick nits, but your statement that "The only other means of paying for such stimulus is for the Federal Reserve to create new money. Unfortunately, this option leads inevitably to inflation."

Seems, with due respect, a bit sloppy. Properly speaking "inflation" is an increase in the money supply ("Federal Reserve to create new money").

The creation of new money doesn't LEAD to inflation, it IS inflation (which of course leads to a general increase in prices of goods and services).

Oh dear CRC it seems D. Boudreaux goes with most people in that inflation is the nett amount of dollars after taking into account the new good & services in the economy. This is true if you are talking about price increase. If there was 2% money growth and 2% goods & services growth in the past years then prices should pretty much stable.

Bill Gates Issues Call For Kinder Capitalism

Gates just loves to wear his ignorance on his sleeve.

According to the parts of the article I managed to get throught before my blood pressure reached dangerous heights, Gates doesn't want to change capitalism but thinks that government should hand out money as an incentive for companies to dedicate their top people to to serving the poor and assorted other central planning. OK. I have an idea - let companies hire them legally so they can work for their lunch and stop incentivizing being poor by rewarding laziness and underachievement with welfare.

From the article: "Mr. Gates isn't abandoning his belief in capitalism as the best economic system....Among the fixes he plans to call for: Companies should create businesses that focus on building products and services for the poor. "Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces,"

So, it's not that Bill Gates wants to change capitalism, he just doesn't have a clue how it works. Since he doesn't know how it works, it definitely needs to be changed. Makes perfect sense.

A while ago, Gates attended a conference where someone pointed out that despite pouring gobs of money into Africa, the continent's GDP has not grown. Frustrated, Gates snapped back "You can't eat GDP".

'nuff said.

Methinks, you are being hard on Gates. What part of his message do you not agree with? Do you not think that 2 billion poor people is a problem?

'Sound money, low taxes, and free trade might not "stimulate" the economy today'

I disagree with this part. Sound economic policies take effect surprisingly quickly. When Harding cut Federal expenditures in 1920, the economy started growing that same year, and rapidly the next year. When the punitive Bush steel tariffs were revoked in 2003, unemployment started falling immediately -- within months, not weeks. These are the data points off the top of my head, but I don't know of a counter point where an improvement in economic policies took years to result in better conditions.

Excellent plan, Don, but only Japanese pearl divers should attempt holding their breath until this happens.

I don't get it.

Posted by: muirgeo | Jan 24, 2008 9:01:36 AM

Muirduck(SFB), we know that.

"Methinks, you are being hard on Gates. What part of his message do you not agree with? Do you not think that 2 billion poor people is a problem?

Posted by: Henri Hein | Jan 24, 2008 6:59:25 PM"

Henri,

It might be for the 2 billion (if this is an actual meaningful figure), but can you make a case for why it should involuntarily occupy the thoughts or actions of the other 4 + billion?

When asked about the poor, Ayn Rand said, "Don't be one."

Can't top that advice my friend. It is about the best you are ever going to get.

'Sound money, low taxes, and free trade might not "stimulate" the economy today'

I disagree with this part. Sound economic policies take effect surprisingly quickly. Posted by: Henri Hein | Jan 24, 2008 7:15:01 PM

Henri Hein,

Do you have muirduckitis? Read Don's words again. Doesn't "Sound money, low taxes, and free trade" sound like pretty damn good economic policy? And, "might not stimulate the economy today." Today, Henri, today. Does that leave you to believe that Don left it open ended to the possibility that it might stimulate it by the end of the year like the circumstance you quoted. Because he said "might not stimulate the economy today" why would you twist that into something unreasonably lengthy?

What is with people today, why do so few have the reading skills to comprehend simple sentences. Oh yeah, they don't teach reading skills in the Socialist Church schools.

Sound money and low taxes require less government spending.

Henri,

The central planning part and the part about changing something you don't understand in the first place. The part where Gates doesn't get that it's always profitable to serve needs and we don't need Gates or the government to point businessmen to those opportunities. Oh, and the part where Bill Gates rose from relative poverty (he was a broke college student) to the richest man in the world, proving that capitalism already works best for those who aren't already rich.

I thought this was pretty obvious from my original post, but I'm happy to spell it out for you.