Tuesday, 20 January 2009

Digging yourself into a hole

Nick Gillespie, at Reason magazine, responds succinctly to Republican Whip Eric Cantor's request for ideas (anyone?) on how to 'stimulate' the economy:

Via Cafe Hayek, Arnold Kling brings into perspective the breathtaking arrogance of those thinking that government officials can spend money more wisely than the millions of individuals from whom they're taking it:
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

1 comment:

wheatington said...

You can imagine a bureaucrat spending up to one million dollars better than the family from which it was stolen?

You should be working for Disney as an imagineer!

I enjoy your blog. Keep up the good work.