Appearing with Dennis Miller, Grover Norquist of Americans for Tax Reform drew a brilliant analogy of government attempts to stimulate the economy. Here’s a slightly amended version:
Government stimulus is like taking a bucket of water from one side of a lake, walking around the lake, pouring the bucket back in and saying you’re stimulating the lake to a great depth and soon the waters will rise…
Mr. Norquist named current members of government, but the underlying problem is bigger than the current government. It’s not really about a lake, either, at least not a real lake like Erie or Titicaca. If we take a step back from Mr. Norquist’s metaphorical lake we see that this is man-made and fed not by the mainstream economy, but by a diversion sluiced from that mainstream. That sluice is the federal revenue stream.
The problem with our central government is that it’s come to focus on that sluiced off revenue and the slough created by it as the real economy when it’s not. The economy that creates real jobs and real prosperity is the one back upstream, the one they’re tapping to create federal revenue. While it doesn’t excuse their excesses, the behavior of statists becomes understandable in the light of this gross misunderstanding. Naturally, they think stimulus projects that benefit the slough will benefit the economy because to them it is the economy. Naturally, it doesn’t occur to them that closing the sluice brake, diverting less, shrinking the slough will help. Naturally, they think higher taxes is good for the economy because it makes their stream flow faster and the slough they’ve created at the end of it bigger and deeper (and so harder to see the garbage and waste polluting it).
What is happening, of course, is that the real stream of the economy is being shrunk to a dribble by the amount being diverted into the government slough — which is rapidly becoming a swamp.. People who could be drinking from the real stream are now dependent on the slough-water. The hard task ahead of us is to lift the eyes of the nation from the swamp and turn it back to the living waters of a truly free economy.