The Moral Lessons of the Economic Stimulus

Kevin Schmiesing of the Acton Institute considers the bill from another angle.

The ARRA [American Recovery and Reinvestment Act] makes clear that we have not learned one great moral lesson: You can’t have something for nothing. Or, among economists, there’s no such thing as a free lunch.

I’m not even sure that anybody is seriously arguing that most of the items contained in this bill constitute “stimulus.” Congress can genuinely stimulate the economy in two ways: decreasing taxes and decreasing regulation. In other words, by putting fewer hindrances in the way of those who wish to produce and consume. Everything else is smoke and mirrors. Government puts money into one person’s hands only by taking it out of someone else’s; or by creating it ex nihilo, which amounts to the same thing (moralists have been condemning the debasement of currency at least since the Late Scholastics).

If the bill has any positive impact, it will be psychological, making people believe that the economy will improve and therefore generating positive economic activity. This possibility seems doubtful at this point. It appears instead that the measure’s most significant effect will be to increase the cynicism with which the American people view their government. I’m undecided yet as to whether that is a favorable development.

Keep an eye on the Acton Institute PowerBlog.  This is a great group and their take on religion and economics are invaluable.  (More PowerBlog entries on this specific topic are found linked from this post.)

Filed under: Economics • Ethics & Morality

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