Albert Einstein defined insanity as doing the same things over and over and expecting a different result.  The feral government does not know how to do anything except spend, so a-spending they will go.  But where will the money come from?  As David Limbaugh points out in his article Are They All Democrats Now?:

As the Heritage analysts point out, when government spends $1 billion on highways, for example, hiring road builders and purchasing road materials, “It must first tax or borrow $1 billion from other sectors of the economy — which would then lose a similar number of jobs. In other words, highway spending merely transfers jobs and income from one part of the economy to another.”

(There is a third option, of course, which is to simply print more money.  But money, like history, is a myth agreed upon.  When we stop agreeing on the myth, we get hyperinflation.  Our paper money is “fiat money.”  It has no intrinsic value whatsoever.)

This is not to say that infrastructure projects are not worthwhile.  That our interstate highway system is beneficial to the “general welfare of the United States” is undeniable.  I would, however, prefer to see an emphasis on railroad expansion and improvement, rather than highways.

The issue is that such projects will not, in themselves, stimulate the economy.  As Mr. Limbaugh points out, spending did not work for FDR, either:

Almost at the end of FDR’s second term, the economy was getting worse, with unemployment at more than 20 percent. Folsom cites the words of FDR’s treasury secretary and one-time confidant, Henry Morgenthau Jr., to make his case. These words should serve as a chilling reminder to all politicians even considering jumping on Obama’s FDR big-spending bandwagon:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot.”

So we must ask ourselves, if government spending cannot create wealth — what can?

First we must define what wealth is, before we can create it.  Economically speaking, wealth is the possession of things one wants and creature comforts.  In that regard, there is productive labor and unproductive labor.  The latter is not meant to be pejorative, only descriptive.  A carpenter can make a chair from lumber, and customer can buy that chair and later sell it to another.  The value of the chair over the value of the lumber from which is was made if the produce of the carpenter’s labor.  The labor of a barber, however, loses its value immediately.  A customer, having gotten a haircut, cannot then go sell his haircut to someone else, nor can he trade it for a can of beans.   So a barber does not contribute to the wealth of the nation.  That said, barbers do contribute to the well-being of the nation.  At some point, one just has enough stuff, and spends on luxuries.  One can spend $10 feeding the family a steak dinner, or spend $50+ at a restaurant.

There is nothing wrong with a service economy, or being part of the service economy.  Both the service sector and the manufacturing sector contribute to our standard of living, but the base must be manufacturing.  If we all work in retail or service, and produce nothing tangible, then we must get our food and clothing from other countries.  But if we produce nothing, what will we give them in return?  So we must produce at least as much as we consume, or we will, as a nation, become materially poorer.   We do not need to produce all that we consume, but we do need to be able to trade for it.  So far, we have been able to do that.

So, what produces wealth is, not surprisingly, production.  But not simply production, but production of tradable  products.  Government policy should either facilitate such production, or at least not hinder it.  Corporate income taxes hinder production, and should be eliminated.  Most government regulations hinder production, and should be examined carefully to see whether and how they should be changed.  Jacking up the minimum wage certainly didn’t help matters, either.

Cannot government spending, rather than corporate investment, produce the same results?  No.  First, the money must be collected, either by taxes or loans or by printing more money, which is nothing but a hidden tax.  That money, capital  if you will, must then be funneled through the feral bureaucracy, which is the epitome of unproductive labor.  So for every dollar the government takes out of the economy for its “stimulus,” it can probably spend only fifty cents producing something.  Stimulus checks sent directly to individuals don’t produce anything at all.

If our congresscritters are serious about stimulating the economy, they will eliminate the corporate income taxes, and reduce the onerous regulatory burdens, let power plants be built, and allow us to drill for our own oil.