Leadership Simplified: Doug Van Dyke

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Fools On The Hill

No, no, this is not about Congress, well, actually, yes, this is about Congress. On January 20th there was big talk of a sweeping stimulus package. All in Congress were touting the concept as “saving the economy.” Since then, however, there are has been a dearth of real action. Perhaps Congress was stunned to read the stimulus package. If they read it thoroughly it is easy to see that it a $800 billion social welfare package (okay, there is $60 billion that will actually stimulate the economy – but is that enough?) In effect, Congress has waited so long regarding the “stimulus” package that the economy – albeit painfully, is taking care of (i.e., correcting) itself. At this point, Congress should consider one of two actions. Counter-intuitively, the smarter is probably the first action. 1. Continue to bicker and back-bite and do nothing. The result of this (in)action will be to allow the markets/economy to sort out its own rubbish. To put out the garbage (i.e., GM, Chrysler, and a bevy of undercapitalized banks) and to allow the cream (There is cream? Right?) to come to the top. 2. Revamp the proposed social welfare handout into a real stimulus package. Here is what is should like: a. Inject $600 billion (71% of the proposed plan) into bridge and road projects across the country. This will do several things: i. Get appropriate amounts of money to States that are organized and ready to put people to work – as opposed to States that are planning to use “stimulus” dollars for State operating funds. ii. Enhance America’s infrastructure iii. Increase safety iv. Allow the multiplier effect work its magic. In other words, let the people and businesses (yes, that’s right “businesses,” contrary to popular media belief, it is NOT a bad word) spend the money they make on the projects in other places. These “other places” in turn spend money in yet more places, and thus $1 spent on a road/bridge project is turned into several dollars. Note: the multiplier effect is Economics 101. Social welfare programs are, well, something different. Ladies and gentlemen, the solution is easier than you think. Contact your Congressman today and educate them.

Posted by Doug Van Dyke on 2009-04-01 at 06:21 AM
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