“The details of different stimulus packages aren’t as important as
where the money is coming from. You can bet the rent money it
won’t come from Santa or the Tooth Fairy.
“There are three ways government can get the money for a stimulus
package. It can tax, borrow or inflate the currency by printing
money. If government taxes to hand out money, one person is
stimulated at the expense of another who pays the tax, who is
unstimulated and has less money to spend. If government borrows
the money, it’s the same story. This time the unstimulated person is
the lender who has less money to spend. If government prints
money, creditors, and then everyone else, are unstimulated. As my
colleague Russell Roberts said in a NPR broadcast, ‘It’s like taking
a bucket of water from the deep end of a pool and dumping it into
the shallow end. Funny thing — the water in the shallow end doesn’t
get any deeper.’ “ - Walt Williams
