Re: Townhall.com – 1/28/2009 – “There Is No Santa Clause” – Walter E Williams

Economics is not a zero sum game. Economic activity is not limited by a fixed set of assets. A private enterprise may borrow money, use it to create additional capacity, and sell the outputs of the new capacity to pay off the borrowing and make a profit too. This profit does not necessarily mean some other private enterprise must run a deficit. That’s why economies can grow faster than population growth and standard of living can rise. That’s why government borrowing to finance our interstate transportation infrastructure has been a huge contributor to economic growth.  

Not every government expenditure is wasteful. Government infrastructure (roads, harbors, sewers, etc) and military, police, and communication services have dated back to the beginning of civilization and over time have proven more reliable and cheaper than similar private facilities and services. There are areas in which government finance and management beats private enterprise in quality of service and efficiency.

While the currently proposed stimulus legislation has provisions which seem to border on boondogglery, the problem with the stimulus package is in the details and not in the concept. Williams should back off his knee-jerk rejection of the stimulus and work to insure that the provisions of the stimulus package actually are additive to our economic health.