Lots of people are saying we must do something, anything to fix the economy. “Anything is better than nothing”.
Eric Munger, an economist, made an analogy recently :
Imagine you had a six-year-old daughter, and that she has a high fever. It’s 1820, and we don’t understand germs or fevers very well. You call the doctor, and the doctor comes to the house. “Please, do something. DO SOMETHING, and help my daughter,” you say.
The doctor takes out a lancet, and makes a small incision in your daughter’s wrist. The theory was that the fever was in the blood itself, and “bleeding” was the only treatment that people in 1820 knew.
It doesn’t work. Your daughter’s fever is still very high. So, you tell the doctor, “DO SOMETHING! You are the doctor.”
The doctor bleeds her some more. And she dies.
And the next day you blame the doctor for not bleeding her MORE and SOONER. But bleeding was the wrong thing to do.
This stimulus is the wrong thing to do. The fact that the first round didn’t work leads me to think we need to stop! But all the desperate economic parents out there say, DO IT MORE! DO IT LONGER! DO IT FAST!
I don’t blame the President. I blame voters, who have the naïve idea that government is responsible for the economy.
Full article at The John William Pope Center webpage
