“STIMULUS”, AKA ECONOMIC CRANK
slang, noun.
“Stimulus” is slang for a sordid economic nostrum administered on the advice of bankers and academics, many of them carrying the title of “Dr.”. But don’t mistake these “Doctors” for devotees of the Hippocratic Oath. “Stimulus” or economic crank, like any other economic panacea, is a fake cure that gives its victims a temporary but false sense of well-being, even as it sets about causing long term damage to users and the economic community at large. The opium of the economists know as “stimulus” acts directly on bread winners and investors by misdirecting them into production plans and consumption levels which cannot be successfully coordinated or sustained across time. As a consequence, the “high” of this political drug lasts for only a few months, often followed by a depressing “crash” period, which cannot be avoided without further and ever increasing quantities of “stimulus”. The drug received its proper name “crank” because it was most often smuggled into policy debates by monetary cranks, the most famous of whom was John Maynard Keynes.
“Stimulus” is taken by fiscal injection, monetarily (directly snorted by banks and borrowers), and through the consumption of pork. A common misconception among politicians and the public is that some administration methods are safer than others, while in reality all act on the economy the same exact way. Economic “crank” damages the coordinative function of prices across the structure of production and consumption, which cause naturally occurring price signals — e.g. interest rates, stock prices, etc. — to be ineffective. Because price signals are responsible for facilitating the coordination of production plans and consumption choices, withdrawal from sustained periods of artificial “stimulation” is extremely painful to economic actors and the economy system, with businesses and households thrown back into economic reality after having functioned for a time in a circus mirror, government-altered state without any naturally produced and undistorted relative prices to guide their plans.
“Stimulus” withdrawal is said to be one of the most painful experiences an economy can endure, and users of economic “crank” should consider other safer ways to buy the support of voters.
Hat tip to the Urban Dictionary. For more on the topic see Russ Roberts, “The Science of Stimulus“.
Cross-posted at PrestoPundit.
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That is hilarious.
That is hilarious.
Thoughts On The Subprime Scam
By now you’ve all read and heard about the subprime mortgage crash in America and its possible future implications on the economy as a whole. Millions of families have been forced to leave their homes, subprime lenders across the country have filed bankruptcy and the effects have even spread to Asian and European markets. What’s all of this really about?
Anti-Globalism
Clearly the economic system is in need of reform, so that we can avoid obvious scams such as this.
The banker has submitted your definition into the archives of Urbandictionary. I hope that you receive credit for it (probably via googling).
This post is simply false. Obviously taxes impose a deadweight cost (i.e. society loses more than it gains). A temporary tax cut temporarily relieves this deadweight cost, albeit at the expense of distributive goals (i.e. the rich will be helped more than the poor will be harmed). Furthermore, two factors prevent the problem you anticipate: first, producers know the tax cut is temporary, so they will produce with knowledge that the jump in consumption is also temporary.
Second, since the economy functions on a cycle, we are muting the dips by having the government forgo money in favour of consumption. Since the tax cut is known to be temporary, there will be no corresponding muting to the upswing when it comes around after the tax cut disappears. But since the upswing will indeed come (as it always does), the goal is for the temporary tax cuts to disappear as consumption itself independently rises, creating a stable-ish level of consumption. This is only possible in an inefficient system, like ours, with high taxes (and thus a high deadweight cost)–we are temporarily reverting to a more efficient system at the expense of distributive goals in order to cushion the downswing in the economy.
You’re forgetting that while the tax cut happens on one side, the government will still spend the same amount (and print the difference). So taxes (including inflation) don’t really go down and your conclusions that this works don’t
follow.
http://www.urbandictionary.com/define.php?term=stimulus
Your definition is officially in the urban dictionary.
David,
You might want to re-read your own post. I count a few glaring errors that render your analysis void.
Lovely.
I had never come across the Urban dictionary before, but it clearly owed a not of deference to Ambrose Bierce, whose ‘The Devil’s dictionary’ definitions ring as true today as they did a century ago. While he intended them as satire, much can be gained by taking them seriously.
to wit:
Compulsion (n): The eloquence of power.
Politics (n): Strife of interests masquerading as a contest of principles .
Honorable ( adj) : Afflicted with an impediment in one’s reach. In legislative bodies it is customary to mention all members as honorable; as, “the honorable gentleman is a scurvy cur.”
That is Fking awesome!!
Anarchy doesn’t mean atomistic individuals living hermits’ lives–people are still a part of a large society–it just means that there is no final, authority on matters legal.
The government will still spend the same amount (and print the difference). So taxes (including inflation) don’t really go down and your conclusions that this works don’t follow.
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