Wednesday, June 8, 2011

Other Artificial Economic Stimulators

In this article I explore assumptions about several other ways our economy is artificially stimulated. These stimulators do not, in the long run, help black Americans. The information provided is designed to question underlying assumptions. It is provided to help readers think critically and participate in an online dialogue. We all want effective programs that truly help black Americans, but successful programs have to be based on valid assumptions. Programs based on invalid assumptions will not achieve desired results.

Like other economic stimulators previously discussed, those discussed here cause dramatic economic ups and downs. When the economy goes up, the media and government make a lot of noise about black Americans doing so much better. But artificial stimulations that do not create wealth ultimately result in dramatic economic declines. Whether the economy goes up or down, Wall Streeters and bankers collect their market fees that they use to finance their incredible salaries and bonuses. A stable economy would not help fatten their personal and corporate bank accounts like an economy that dramatically swings. And this continuing pattern involves nothing directed toward overcoming the systemic issues associated with black Americans being on the bottom of the economic heap.

The economic stimulations discussed in this article and other articles result in on-going increases of governmental debt including the national debt, and state and local government debt. Combining difficult-to-come-by numbers, each American man, woman, and child must own about $60,000 in government debt that someday must be paid off. As this debt increases, government only pays (with our tax money) the interest on the debt, paying little, if anything, on the principle. Because government debt continues to rise, we have not created adequate wealth through the programs and activities financed with the money borrowed. (See Too much of our economy is a house of cards and government continues to borrow and spend money to artificially prop it up.

It is important to remember that a lot of the money spent by government comes from borrowing. It is also important to remember that little of this helps black Americans in the long run. As has always been the case, some black Americans continue to do well in our economy - Oprah is clearly not poor. What has not happened as yet is for a much larger percentage of black Americans to achieve an improved, stable livelihood in a growing, but stable, mainstream economy. When economic stimulators again result in a declining economy, these people will again not do well.

Economic stimulators briefly discussed in this article include various types of government spending that do create jobs but do not result in borrowed money being paid back.

Money spent by the Department of Defense and other federal government agencies on the Afghan war and the continuing conflict in Iraq will be greatly reduced when our government declares victory and brings the troops home. Government employees, members of the military, and defense contractor employees will be layoff and our economy will swing down. It always does following a military downturn based on either victory or defeat.

When other government spending is reduced in attempts to bring down debt, many government employees will lose their jobs as will employees of companies that sell goods and services to government agencies. These will surely include ineffective welfare and skills training programs that do not result in recipients getting a job and paying enough taxes to pay back the borrowed government money used to finance the ineffective programs.

In summary, this and recent articles deal with swinging business cycles that help a few (Wall Streeters and bankers) and does not help many in the long run (particularly black Americans). The bottom line is that none of this addresses the real issues regarding black American’s employment, health, wealth, and retirement. Future articles will deal with these issues.

Joseph L. Bass, Ed.D. is a retired business/organizational consultant, seeking to improve society using his decades of experience enhancing corporations and government agencies. What is a society other than a large organization created by a people for their own betterment? He is executive director of the non-profit ABetterSociety.Info, Inc.

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