Wednesday, February 22, 2012

Yet more proof that the US Administration is economically illiterate!

Valerie Jarrett is 'a senior advisor and assistant to the president for Public Engagement and Intergovernmental Affairs for the Obama administration'. She's also just demonstrated that she's economically illiterate, and has no more business managing the affairs of this nation than she does pontificating on subjects she doesn't understand! (A tip o' the hat to the Weekly Standard and the Drudge Report for publicizing her remarks.)

Let me emphasize her idiocy once more:

"People who receive that unemployment check go out and spend it and help stimulate the economy, so that's healthy as well."

If Ms. Jarrett actually believes that, there's a bridge in Brooklyn, NYC I'd like to sell her - provided she pays in cash, and in small bills . . . Let me illustrate the absolute, almost unbelievable stupidity of her remarks.

  1. "Unemployment checks" are issued by the government. To get that money, the government had to first take it away from productive citizens and/or corporations through taxation. In effect, it denied those citizens and/or corporations the right to use their own money for their own purposes, and instead confiscated it from them to use for purposes deemed necessary by the government. (Whether or not they were, or are, or will be 'necessary' is, of course, highly debatable.) What it can't raise through taxation, it must borrow (and at present the US government is borrowing almost half of every dollar it spends). Those loans must be repaid, plus the interest on them, which represents a further drain on the national purse.
  2. In order to collect taxes, the government had to spend money on the collection process. It then had to administer the funds while they were allocated between departments and assigned to their final purpose; and finally, it had to administer the process of issuing the checks and getting them to their intended recipients. All of this cost money for things such as personnel, transport, communications, offices, furniture, computers and software, consumables (e.g. the paper on which the check is printed, the ink used to print it, the envelope used to mail it, etc.). Adding up all this administrative overhead, it probably costs somewhere between $1 and $10 to issue a single unemployment check. Guess who pays those costs? That's right - the taxpayer. You and I. Again.
  3. The recipient of the welfare check may use the money to buy things that are good and worthwhile, such as food, medicines, clothing, etc. On the other hand, they may spend it on things that have little or no worth - excessive alcohol consumption, drug abuse, gambling, etc. Thus, the recipient may or may not derive real benefit from that check. The same applies to the economy.
  4. Even if the recipient spends it on good and helpful things, they're only putting back into the economy money that the government forcibly extracted from it in the first place! They're not creating any new or fresh 'stimulus' by their spending - they're simply putting back into circulation what the government withdrew. Furthermore, they may not use it as wisely or as well as the people from whom it was taken through taxation. A business might have used its money to expand its operations, or buy more inventory, or hire more people. Because it had to hand over that money to the government, it couldn't use it for that purpose. We're left with the pious hope that the recipient of an unemployment check will use it in a way that's just as positive for the economy. (I trust you'll pardon my skepticism . . . )

Unemployment checks do nothing at all to stimulate the economy. On the contrary, they represent a net drain of resources from it! Ms. Jarrett is clearly incapable of understanding this most basic principle of economics . . . yet she's a senior adviser to our President! Heaven help us all . . .

This is yet another reason why we need to get rid of this entire Administration in November's elections. We can't afford to leave them in office to finish destroying our economy! (That has nothing to do with their party, either - after all, Republicans can be just as economically illiterate as Democrats. It has everything to do with the competence and quasi-Socialist ideology of the present Administration!)



The Lost Goat said...

Unfortunately, this round of Republican primaries is amply demonstrating that Republicans are as economically illiterate as Democrats. Short of stocking up on ammo, I'm not sure there's much we can do about it.

Stuart Garfath said...

Australia is currently going through the same incompetant economic mismanagement misery that America is suffering.
The current (unelected by the people) Prime Minister, Julia Gillard, is a dyed-in-the-wool Socialist, and because she and her Labor government will do ANYTHING to retain power, Australia is being bled dry, the Government is BORROWING $115+ MILLION EVERY DAY THEY ARE IN OFFICE, a monstrous accumulating debt loaded with Compound Interest my Great-grandchildren will still be paying for, long after I am gone.
Australia is not a big country economically, yet, the billions of dollars wasted over the last four years beggar belief.
Australia is hurting.

Anonymous said...

With a little luck,

Maybe, just maybe a huge asteroid will come along and solve all of our problems.


Joe said...

I always love it when the current administration throw out the statement that every dollar spent on unemployment payments generates two dollars of economic activity. If that's the case , why don't we just put the entire country on unemployment insurance.

Sounds like a perpetual motion machine to me.

Stranger said...

Valerie Jarrett is a long time Chicago Combine insider, and according to some Chicago observers the Combine's "handler" for their man in the White House, Barack H. Obama.

She does not have to be economically literate, merely able to take and relay orders.


Caspian said...

Keep in mind this is the same woman, that last year at a DC function, told a general (she mistook him for a waiter) to get her a drink.
They are the worst this country has ever produced.

Bob@thenest said...

Peter, I don't find it scary in the least. She's got an Obama job, nothing more. He doesn't listen to her because he already knows what he wants to do and he's doing it. He simply gave her a job because Advisers make good money and he owed her. It would be different if she were actually changing his mind to her views, but she's not -- he's already there.

What I do find scary is the fact that so many people seem to agree with both of them and the fact that this next election is anything but a likely change of political philosophy.

By the time the Republicans, who I agree are equally ignorant, are done shooting each other, there will likely be no viable combatant left standing against the Obama machine.

No, we are not going to vote our way out of this.

And THANK YOU for killing that captcha!!

Donald Sensing said...

BTW, Nancy Pelosi said the same thing last year and added that unemployment checks create jobs. Yes indeed, let's go to the tape.