The motion at the Intelligence Squared debate was "Congress should pass Obama's jobs plan -- piece by piece." Daniel Mitchell, an economist with the Cato Institute, argued against the motion alongside his partner in the debate: another Libertarian, Richard Epstein.
Mitchell argued that the president's job proposal either in its entirety or piece by piece represents a fundamentally misguided view of the economy. The flaw, he argued, is the belief that you can make yourself richer by taking money out of one pocket and putting it in the other.
Mitchell said:
Here's a little quiz that will determine whether or not you're qualified to be a member of Congress. Let's divide this room in half. Let's borrow all the money out of the pockets of the people on this side of the room and give it to the people on this side of the room. Now here's the quiz. Raise your hand if you think there's more money in the room.
Mitchell's argument is part of the ideology these days among Congress people whom Mitchell must consider qualified for their position. It's an argument struggling without much success to turn the nation in the direction they want the country to go.
Mitchell's quiz is about whether government directing more money to social and infrastructure investments would better serve the nation. That's the big debate.
Econ 101: economic downturns are accompanied by a withdrawal of money from circulation, a part of the decline in business and a decline in employment. A little redistribution of wealth -- money to those who will spend it -- improves its circulation and the economy. This is done by government initiative that is a part of our history: the Golden Gate Bridge was a WPA (Works Progress Administration) project. But admiration for Roosevelt's New Deal and WPA is not a part of the ideology of those Mitchell thinks belong in Congress.
More money in the hands of people who really need it increases people buying things, which encourages businesses to produce more and to hire more people. Mitchell surely realizes that economic growth creates more wealth (and more revenue with which to pay down the debt).
Some of us believe that taking a little money from those who have it in superabundance is less money for them to gamble with in the stocks or other markets and no big loss for them or the rest of society. Apparently, Mitchell believes that the government taking their money would be denying them funds that they would invest in stimulating economic activity -- hence his no-gain money-shifting equation.
Copyright © 2011 by Frank E. Smitha. All rights reserved.
