Jeff Neal for C.U.R.E. - Certain Unalienable Rights Endowment

Romney Concedes Election and Admits Wealth is Created by Bankrupting Companies

In Opinion on May 26, 2012 at 2:34 pm

Asked by Time’s Mark Halperin Wednesday why he wouldn’t push major government spending cuts in his first year, Mitt Romney responded as follows:

“Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.”

If that’s what Mitt Romney believes, I suggest that he concede the election immediately and save us the trouble of watching him pretend that he can make a difference as the next President.  If he doesn’t believe those words, I want him to explain why they are wrong, so that we know he might at least try to make a difference.

Has he really adopted the governing philosophy that is based on the fallacy that ‘spending’ by either government or private parties is the same thing as economic production?  Does he really believe that buying things is the same thing as or has the same economic effect as making things?

Economic activity happens when someone deploys labor or capital, or both, to produce a thing or service for which someone else will pay with money he earns by being productive.  The trade of dollars for the thing or service makes the activity measurable, but the respective acts of producing are all that have any economic value or consequence.

Assume a government of a country of three men, Ted, Joe and Bill.  Having the government take money from Ted and give it to Joe to buy a widget from Bill IS NOT economic growth or activity.  If Bill makes another widget because he thinks there will another buyer, that IS economic growth/activity.  But, Bill will not do so if he thinks that the only way he will sell widget #2 is if the government lets or forces Joe to buy it (with Ted’s money again).  Bill knows that eventually Joe will have too many warehouses full of widgets, and Bill will not expend more of his labor/capital to make widgets that sit on a shelf.  He loves his labor and capital (a.k.a. his life) too much to waste it that way.

Furthermore, eventually Ted runs out of money, as does Bill, because nothing of value is being created in this exchange of dollars for widgets.  Ted shuts down whatever he did previously to earn the money the government took from him.  (If he were being economically productive, the government’s rationale for taking his money was flawed and immoral, right?)  Then there’s Joe, and since he’s busy storing useless widgets he bought with someone eles’s money, he is not busy producing something Bill wants to buy with all the stacks of money the government took from Ted for Joe to ‘spend’ on widgets.

Scoreboard:  Ted’s broke.  Bill has money but nothing to buy with it.  Joe has widgets no one else, including Ted, wanted.  (If Ted had wanted widgets, he would have bought them with his own money before the government took it from him, correct?)  That’s the end of the story, and it’s not a story of economic activity, it’s a story of lives confiscated and ruled by Mitt Romney or Barack Obama; lives wasted in favor of getting someone’s vote – Joe’s and Bill’s, probably not Ted’s.

If Mitt Romney believes that reducing government spending will reduce economic activity, then perhaps we know the reason he won’t or can’t defend himself against the silly accusation that he got filthy rich by bankrupting dozens of failing companies while running Bain Capital; maybe he believes that lie as well.  (I don’t > Why “Vulture Capitalism” is a big lie.)

Our choices in November aren’t inspiring much hope, are they?


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