[Oe List ...] Stimulus package examined

Tue Feb 17 20:38:55 EST 2009

Karen and colleagues:  The professor's example suffers from flawed assumptions of equating the laws of physics to the probabilities of economics.  In the case of water being moved from one part of the pool to another there is no 'multiplier effect' because no extera water is created.  Water observes the laws of mass conservation:  Water in ='s water out.  Economics on the other hand does not operate obeying the laws of in = out.  Take the example of a loan:  the lender earns interest on his money, the borrower uses the money to invest in a business or some activity to make more money and along the way pays an employee, buys raw materials from someone else, invests his or her time to create new value, has to pay his or her bills, taxes, and numerous others, who in turn take the reciepts and exercize similar 'multiplier effects big and small.'  This is the nature of economic probablility:  money expands or contracts.  The Key is often in psychology and optimisn vs, pessimisim.    Thus the success or failure of Obama's Stimulus will ultimately lie in the restoration of hope and the lessening of fear.  If we succumb to a mindset of 'Survival Mentality', we all pull in our belts, start to hoard our savings, goods, money, the total result is a shrinking of the Total Economy.  On the otherhand if we follow our hearts, be liberal in our giving back, be liberal in our love, follow the flow of our money so that it does good for oursewlves and our fellow journeyers on the planet....then the economy grows.
    How many of you remember " Move 222" in the early days, I'd say 1967 or 68.  We faced an economic money crisis in EI and the Spirit Movement.  We needed an exorbitant sum:  $222,000!  We didn't know where it could come from!.   I remeber asking Carl Muma at the time:  How long can we keep this up Carl?  Each quarter, each year, Spending more money than we take in and more than we have in the cupboard?  His Answer:   As long as we can take in more money than we did last quarter and more than we took in last year...as long as we can do that...we can continue spending more than we take in!!.   That's how economics works!  
And sure enough...Move $222 was a huge success.  And by 1970 $222,000 looked like chicken feed vs our budget.  

Rod Rippel 
  ----- Original Message ----- 
  From: KarenBueno at aol.com 
  To: oe at wedgeblade.net ; dialogue at wedgeblade.net 
  Sent: Tuesday, February 17, 2009 10:08 AM
  Subject: [Oe List ...] Stimulus package examined

   My colleagues--I received this from one of my right-wing friends.  Please help me compose an adequate response.

  Karen Bueno

        Shortly after class, an economics student approaches his economics professor and says,

        "I don't understand this stimulus bill. Can you explain it to me?"

        The professor replied, "I don't have any time to explain it at my office, but if you come over to my house on Saturday and help me with my weekend project, I'll be glad to explain it to you." The student agreed.

        At the agreed-upon time, the student showed up at the professor's house. The professor stated that the weekend project involved his backyard pool.

        They both went out back to the pool, and the professor handed the student a bucket. Demonstrating with his own bucket, the professor said, "First, go over to the deep end, and fill your bucket with as much water as you can." The student did as he was instructed.

        The professor then continued, "Follow me over to the shallow end, and then dump all the water from your bucket into it." The student was naturally confused, but did as he was told.

        The professor then explained they were going to do this many more times, and began walking back to the deep end of the pool.

        The confused student asked, "Excuse me, but why are we doing this?"

        The professor matter-of-factly stated that he was trying to make the shallow end much deeper.

        The student didn't think the economics professor was serious, but figured that he would find out the real story soon enough.

        However, after the 6th trip between the shallow end and the deep end, the student began to become worried that his economics professor had gone mad. The student finally replied, "All we're doing is wasting valuable time and effort on unproductive pursuits. Even worse, when this process is all over, everything will be at the same level it was before, so all you'll really have accomplished is the destruction of what could have been truly productive action!"

        The professor put down his bucket and replied with a smile, "Congratulations. You now understand the stimulus bill."

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