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Latest gambit economically unsound

Posted: January 17, 2010 9:56 p.m.
Updated: January 18, 2010 4:55 a.m.
 

So, Santa Clarita's city government has been suckered into the idea of "giving money away to fight the recession." Their latest gambit "gives away" $100,000 to local businesses, in $5,000 increments.

Not only is this fundamentally unfair to businesses that do not receive the grants, it subscribes to an economic fallacy that ends up hurting our city rather than helping.

This is because government cannot create any jobs or any economic activity that it does not automatically remove from somewhere else.

It's like trying to fill up the deep end of your pool by taking buckets from the shallow end.

Not only does the pool not increase in water level, it actually decreases because of the bureaucratic "spillage," and the simple economic observation that whatever is artificially supported must be less efficient and productive than whatever is taxed (or borrowed from) in order to pay for the whole charade.

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