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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 

Condensed Articles

December 1, 2016

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GOVERNMENT STIMULUS IS AN OXYMORON

By Michael Pento

(condensed)

The accumulation of debt, at its very essence, is simply borrowing consumption from the future. And this is true on any level of debt, be it either public or private. Just as savings is deferred consumption, the exact opposite is true for debt. Therefore, it can only be beneficial in the long-term if it leads to an expansion of productivity in the present. If the funds borrowed do not improve output per unit of labor it is much more difficult to pay back that debt and any perceived benefit ends up being nothing more than an ephemeral illusion.

This is the reason why public debt is the most pernicious variety. The problem with government spending is that it mostly amounts to little more than hole-digging and filling. Borrowing money to pay people to empty the ocean onto the beach may temporarily increase employment and demand in the economy. But since this is merely state-directed busy work, it does not grow the economy and expand productivity. Thus, the result is a rise in the debt-to-GDP ratio.

If government debt, a.k.a. “investment” led to viable economic growth the debt-to-GDP ratio around the globe would be falling. The truth is government debt amounts to nothing more than a gigantic misallocation of capital that brings along with it future anemic GDP growth, higher interest rates, and greater inflation.