Did you ever try to find the end of a hoop?? | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    When we look at what the anointed one and his henchmen are proposing to do ( spend) to alleviate the problem of high unemployment, it certainly looks like they are trying to do just that; find the end of a hoop. Do you suppose they will ever realize that a hoop has no beginning and no end??

    The Prez' approach to solving every problem that comes along seems to be to head back to the his economic hoop in which money is taken from those who work and given to those who don't. I suppose if you are a recipient, it doesn't seem like such a bad deal (assuming you have no compunctions or feeling for those who worked for the money that found its way into your pocket (or purse). The problem with this approach in the final analysis is that you end up right where you started. It is a zero sum game. You may even end up behind of where you started for two reasons, one economic and one practical (not to imply that economics is not practical - especially after the awarding of the last Nobel for economics - hmmm...). From an economic standpoint, we never seem to hear any conversation about what might have been done with that money had it stayed with the folks who earned it. From a practical standpoint, we never hear any conversation about how much "overhead" is involved when the government sets up programs first to confiscate the money and then to distribute it. Although from what we have been hearing lately, the latter part of that effort apparently isn't quite as difficult as one might think. Just check lists of big contributors and "bundlers" to see what activities they support and then fund them. (Think Steven Chu; Steve Spinner; Solyndra.)

    I remember an editorial cartoon from a long time ago that perhaps best describes the anointed one's approach to prosperity. It was a caricature of our President (Nixon, at the time) peddling the virtues of daylight saving time. He cut a foot off of the top of a blanket (representing daylight), sewed it on to the bottom and proclaimed the result was a day with more daylight. And so it is with the community organizer and his idea of how to create jobs. The difference is that he only tells us about the part where he reattaches the blanket and claims to be improving the economy. What he never seems to mention is that every dollar he wants to hand out must be confiscated from someone. For most folks old enough to know, it is difficult to imagine anyone more devious than Richard Nixon (RIP), but....

    Actually, the administration is so misguided (or is it dishonest??) that they preach the gospel that things like unemployment payments and food stamps contribute to improving the economy. Another assault on the taxpayers' intellect. Give me a break!! Saying those things does not make them so; and they aren't; and that's all there is to it.

    One thing that seems to be either totally overlooked (at best) or simply glossed over (at worst) is that there is spending and there is spending. After tax wages go toward two rather distinct ends. The first is subsistence spending; the second is discretionary spending.

    Subsistence spending is that spending required to meet basic needs. Discretionary spending is that spending that takes place after basic needs are satisfied. It is in the discretionary spending area where job creating demand occurs.

    The problem is that the line between the two is frequently badly blurred (maybe on purpose, and maybe not). Where the line is depends on the folks involved. For example, HD Color TV/VCR is a basic need for one person and it is a luxury for another person. It would also seem that a "texting" cell phone is a basic necessity for most folks any more. (Yes, I know, it's for the safety of the kids.) So which definition do (should) we use when making handouts to the so called "needy"?? Actually, I'm not so sure that the answer has as much to do with the amount of suffering that goes with being in poverty as it does with how much the proponents of massive handouts stand to gain from their kindness and generosity - predominately with other folks' resources. (Think Jesse Jackson, Al Sharpton, there's more - plenty more.)

    It seems as though the money we confiscate is money that would likely have been used for discretionary purchases while the money we hand out is (should be) used for subsistence spending. So how do we leave more of the money that people earn with the people who earned it?? The current approach seems to be that we start with a report that identifies a rather large percentage of the population as "in poverty" and then we "sell" the general population on the need to provide more help to these unfortunates. This sales process almost invariably involves spotlighting folks who can't afford groceries or health care as being the target of their largesse. The HD TV/VCR. folks or the $100.00 per month "texting" cell phone group are also included in the "poverty figures", but will seldom be hi-lighted. Establishing a legitimate supportable definition of "poverty" (which we most assuredly do not have now) would be one way to help reduce the costs of these giveaways. Mandating drug tests before you can get a government handout (which is being implemented in several states) would be another. It's surely something to think about... But I digress...

    Subsistence spending is not something that will have much impact on the economy. We are already producing the things that will satisfy true and basic subsistence spending. It is the discretionary spending that will get the economy moving again. The first thing that will happen when discretionary spending picks up is that inventories will start to drop and they must be replenished. Factories, in turn, will have to increase output to rebuild the inventories; people will have to be hired to keep the factories humming. They will earn money and they will pay taxes, thus increasing government revenue (without having to increase tax rates). People who are allowed to keep what they have earned for themselves will be able to purchase a lot of things that they have had on their wish list (from when they were between jobs - or were having part of their earnings confiscated), which will feed right back into the economic spiral. More consumption, more production, more work. more income, higher government revenues, and so it goes.

    Contrasting the "hoop theory" of job creation with the spiral theory, it is clear that the "hoop theory" does nothing to cause the economy to expand; the hoop just goes around and around. Take from the rich, give to the "poor". Denigrate the "rich". Start class warfare. No growth. The spiral theory also goes around and around, but with each revolution the spiral sweeps a larger arc which exemplifies economic expansion. But then why wouldn't a big basketball fan prefer the "hoop" solution, economics not withstanding?? Next time we vet a presidential candidate, we should look for one with an interest in football. He (or she) need not be a quarterback but should be familiar with and able to handle spirals. We certainly don't need more interest in hoops.

    D'ya think??