Circus Economics (a division of panem et circenses)

This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment? A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money? A. From taxpayers.

Q. So the government is giving me back my own money? A. Only a smidgen.

Q. What is the purpose of this payment? A. The plan is that you will use the money to purchase a high-definition TV set,
thus stimulating the economy.

Q. But isn't that stimulating the economy of China? A. Shut up....!


Frederic Bastiat was an eighteenth century economist who started with a wonderful sense of humor. There is a joke going around on the internet that Bastiat would be proud of. The current approval ratings for our elected officials are at historic lows - the President has been stuck in the low 30s and Congress is below 20%. They cannot seem to understand why that is. Anyone with a modicum of sense should be able to explain it. The stimulus package, whose checks began arriving recently, is a great example. Our elected officials rush in this even numbered years (Did you ever wonder why there are no economic stimulus packages in odd numbered years?) to pass bills for which they think we will remember them fondly. And their attempts get increasingly pathetic. For example this year, we all got postcards, which cost something to produce, that said expect your stimulus payment soon. (As if we waited on their every pronouncement) But like many things they sent this out to every taxpayer - so even those who made too much money to be stimulated received the card.

Bastiat has a couple of great examples of this nonsense in his book Economic Sophisms - which is still an enjoyable read today. For example, he presents the story of the candlemakers petition -where the candlemakers present a petition on unfair competition that they face from the sun. They argue that if window makers were forced to offer opaque windows that citizens would use more candles -even in the daytime. He also had a wonderful idea about the "seen" and the "unseen" - he gives an example of a kid who breaks a window which the homeowner is forced to purchase a repair. Some would look at that as a net gain for society - but Bastiat correctly points out that the benefit to the glazier (the guy who fixed the window) is offset by the losses to the other providers in society who don't get the trade from the homeowner.

The Roman poet Juvenal wrote about the tendency of rulers to offer "bread and circuses" in exchange for political loyalty. In essence political leaders thought they could rule in his time by offering the trappings of benefits but not the real benefits of an effectively run government. Juvenal and Bastiat would be amused at the continuous demonstration of their insights.