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Roll Out The Wheel Barrels

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JOHN HERBERT

From Where I Sit

Published: February 14, 2009

Time to get into the wheelbarrow business big time. That ought to create a few private sector jobs. We'll need wheel barrows to push the mountain of $100 bills just to buy a loaf of bread.
The stimulus packages now bouncing around Congress in search of compromises (aka bipartisanship) have just one meaning: We're about to suffer through a spectacular round of inflation like we haven't seen in at least 75 years.
While final economic stimulus law may have a price tag of somewhere between $800 billion and $1.2 trillion, both unfathomable amounts, nobody has asked — as far as I know — who's going to pay for it? Where is the money coming from? How are we going to spend money we really don't have?
Certainly not from traditional sources like Japan, China or Germany. Their economies have tanked pretty much like our own — and they've all drawn up stimulus plans, too.
Further, our credit ratings can't be too helpful. Who would dare lend money to a deadbeat economy with all the symptoms of a severe case of salmonella? Flush once, but there's always more to come.
The only source of so much new money will be the feds' own printing presses. What if it doesn't work? As far as I know, Obama hasn't claimed an ability to walk on water — yet. Will we have to do it all over again in six months? Frightening thought, but all too real a possibility.
Of course, you could always take from the rich and give to the poor. But, that wouldn't give us much of a stimulus to get the economy on its feet again. The poor would only spend the extra cash, probably on goods made in China. Improving their lives, but only short-term but without creating American jobs. And the rich, theoretically, wouldn't have anything left to invest in new business opportunities.
All too little of the American stimulus is a "quick fix" — about 15 percent of the entire package — in the first two years of Obama's presidency. Only about two percent of the total will go, for example, to clean energy. Five percent is earmarked for highway projects, notoriously slow starters.
That's not serious, campaign-promised change. And obviously not enough to make an immediate impact. Even if President Obama plays out his "catastrophe" cards over the next few days. Pretty soon, "catastrophe" will wash over us like just another fairy tale.
Then, we're suddenly in the midst of the fast-footed incriminations of the 2012 election campaign. No amount of economic voodoo will help.
I've lived under two so-called socialist regimes, one that works (Sweden) and one that's so bad (Argentina) it leaves you gaping. Their particular political brand is called "national socialism," Nazism as in Hitler, Mussolini and Franco. Even today, southern Argentina looks like a rustic small town in Bavaria that has been airlifted to a Patagonian hillside.
Sweden has wised up, slicing corporate income taxes to 26 percent, a third lower than the American average of 39 percent. Although Sweden has some of the world's highest personal taxes — more than 50 percent plus payroll and pension obligations, the Center-Right coalition government realizes it must cut taxes to compete with industry in Ireland, Eastern Europe and the Far East.
To jump-start the business economy, Sweden eliminated its death tax altogether four years ago. America's death tax lingers at 45 percent. Obama insists U.S. business is "undertaxed." Last summer, Sweden's relatively new finance minister told me the corporate tax level is one factor big companies evaluate carefully when they are considering setting up shop.
Nancy Pelosi, Speaker of the House and No. 3 in line for the presidency, would probably enjoy Argentina. Its quirky tax structure keeps the ferries full between Argentina and Uruguay. Wealthy Argentines keep their money safely out of reach of confiscatory authorities in Buenos Aires.
About 100 years ago, Argentine courts began allowing the government confiscation of private property. Still, it's not enough. The country goes broke every 10 to 15 years. The last time was 2001, and the Argentines are close again.
Now, they've nationalized the nation's private pension assets — like draining an American's private 401(k)s and depositing them in a government account which can be used for just any purpose. That's socialism at its worst —pure confiscation. Speaker Pelosi would have appreciated the social engineering.
The official reason, said the Argentine president, is the market is too risky for retirement savings. Fascinating. Over the past 15 years, the Argentina 401(k)s have grown an average of 14 percent annually. I doubt it would do much good, but I heartily recommend President Obama takes a closer look at just how bad it can get when big government "just wants to help."
As the Argentines have demonstrated, confiscation trumps stimulus every time. If you examine the stimulus package carefully, we aren't far behind. When a government like Argentina's is already into nonstop confiscation, things can only get worse.
A regular columnist for Hernando Today, John Herbert lives in Spring Hill.

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