Thoughts on Economics and the Stimulus

Economics is complicated. That's why I like it. There are right answers and wrong answers, but no one is sure which is which. It's the kind of stuff that makes your brain turn. I am not an expert, but that doesn't stop me from thinking about it!

First, the economy is nothing more than the resources (money) we spend. There are three parts to this ... what we as consumers spend, what businesses spend, and what the Government spends.

So let's look at consumer spending:

We can stimulate by lowering our taxes, right? This gives us all more to spend so it stimulates the economy. True, and it has worked in the past. But logic says it can't work forever. Eventually taxes get so low that the government can't function. I don't know about you but I like having schools my kids can go to and roads to drive on.

At some point these huge government deficits are unsustainable ... lowering taxes makes that situation worse.

Right now, if our taxes were lower, most of us would save a good chunk of it (or pay off debt). These actions do not help the economy at all. So you've taken a big chunk out of the efficiency of this solution. I get an extra 1000 dollars, but I only spend 200 more than I would have without it. Not a very good return on investment.

A lot of what we would buy with our extra money is actually an import. A good chunk of it would go overseas to China or the like. China in the past has been generous in reinvesting that money in the US Government and US companies. Those investments aren't looking so good now. I doubt they will keep it up.

Some will say that lowering taxes will raise tax revenues in the future because the economy will be stimulated, causing us to earn more, thereby the percentage of our income goes down, but the tax dollars we pay goes up. This may be true at some levels. Logic again says this doesn't work forever. If taxes hit zero, revenue does not go up - there is none! Somewhere there is a line.

Lowering taxes generally affects those who pay taxes so it has a disproportional benefit on the rich. The rich have money, so it makes sense to stimulate the economy by starting with them, but this increases the gap between rich and poor. Trickle down economics is just that ... a very small trickle ever makes it to the poor.

Business Investment:

I don't have much to say on this one other than our tax rates on businesses are high and I don't really understand why. In my uneducated opinion, I would think that lowering this would be the best way to stimulate the economy. Of course, most people would see this as bailing out the CEOs while we little people get nothing. I don't get that. CEOs make way too much ... I agree. But my company also pays my salary, and I kind of like that. We all get paid by companies. If they benefit, we benefit.

Government Spending:

Here is where things get messy. As best I can tell it has never really worked. However, it is still very attractive because the people running the show get to throw lots of money at whatever they want. I read an article in the WSJ the other day saying Obama's team was using a multiplier figure of 1.5 - meaning that for every billion they spend, they think the economy will benefit by 1.5 billion. I totally don't get that! If that's really true, why not spend 10 Trillion, or 100 Trillion ... I mean a 50% return is pretty stinkin' good!

First of all the Government doesn't have the money to spend - so the cost of borrowing money must get added in and it rarely is. This would lower efficiency and take the multiplier below 1.

The government is generally inefficient. They do less with the same amount of money than a private corporation would. This would lower efficiency and take the multiplier below 1.

Government spending takes a long time which leads to inefficiency. Have you ever seen them do anything fast?

Government spending can be focused on domestic investment so this is a big advantage over tax cuts.

Government spending can be focused on the poor which may not do much for the economy, but is a nice plus.

Government spending can potentially use resources (labor, etc.) that would have otherwise been used for private investment. This lowers efficiency. The only way government spending doesn't do this is if every resource the government pays for would otherwise be sitting idle - an impossibility.

Whew! That's enough for now. Here is where I fall after all of this: I think theoretically government spending would work the best if and only if we were smart enough to know how to do it. The problem is, we are not! We may or may not target the right things. The thing I like about lowering taxes is that it allows everyone to try something different which increases the chance that someone will succeed in spurring on the economy. I think this is why tax cuts have proven to work in the past, and government spending results have been debatable.

If I were king for a day ...
First of all, I would have more information and need to be quite a bit smarter, but ignoring that point:
I would lower business taxes and temporarily lower consumer taxes.
I would focus government spending on specific projects that support business. (roads, power, etc.)
I would focus government spending on the poor so that we try to do some good. If we have to spend it somewhere, I would prefer there.

So that's my plan. Similar to what's out there, but different. More business tax cuts, and less government spending (with more focus). Of course, that wouldn't be very good politically for a lot of people ... and that brings us back to what makes government inefficient.

Our bodies are good!

I've been spending some time reflecting on some talks I heard this weekend by Christopher West. Christopher is a Catholic theologian and spoke incredibly eloquently about the Theology of the Body written by Pope John Paul II. Here is my attempt to summarize the key take away for me:

The body is good. It is not something to be killed, but something to be treasured. Our problem is that we do not treasure it enough. Our body is in fact the very way that God brings visibility to spiritual truth. We, the church, are the body of Christ - that is we are the physical reality of Christ in the world. Without our bodies we can not be what we were designed to be.

The quest for sexual purity is not one that requires us to put to death our desires, but to instead satisfy our desires in the only way that can result in ultimate satisfaction. Satisfaction that is shameless, pure, and beautiful - satisfaction that satisfies completely and does not send us on a quest for more. For those of us that are married, this satisfaction comes from the oneness we experience with our spouse. This oneness is a symbol of the oneness we will one day experience with Christ. For those of us that are single, this satisfaction comes from discovering that our desires can lead us to a oneness with Christ in such a way that we find a satisfaction in Him that is impossible for a married person to experience. I admit, the married way sounds better to me, but I suspect this is because I do not accurately grasp what an undistracted life, completely and totally enveloped by God, would be like.

The problem is not that we have desires, but that we too often satisfy them in ways that miss the mark. The Bible calls 'missing the mark' sin - falling short of the glory of God (Romans 3:23). Sin is simply taking a legitimate desire meant to point us to God, and satisfying it in a way that falls short. By falling short, we rob God of his glory, and rob ourselves of our joy.

Here are some quotes that express this truth better than I ever could:

"The body, in fact, and only the body, is capable of making visible what is invisible: the spiritual and the divine. It has been created to transfer into the visible reality of the world the mystery hidden from eternity in God, and thus to be a sign of it" - Pope John Paul II

"I know some muddle-headed Christians have talked as if Christianity thought that sex, or the body - were bad in themselves. But they were wrong. Christianity is almost the only one of the great religions which thoroughly approves of the body - which believes that matter is good, that God Himself once took on a human body that some kind of body is going to be given to us even in Heaven and is going to be an essential part of our happiness." C.S. Lewis

"Every man who knocks on the door of a brothel is looking for God" G.K. Chesterton

Poor Herm Edwards

Everybody is feeling sorry for Herm Edwards. The poor guy doesn't know his future and can't look for other jobs. (Which we don't even know is true for sure.) ESPN and the local sports talk guys say it's not fair. I say Hogwash! (Always wanted to use that word.) The guy is still getting paid by the Chiefs and getting paid a pile of money at that. As long as he's getting paid by them, he should be working for them ... even if the future plans don't include him. Scott Pioli's goal should be to do whatever is in the best interest of the Chiefs, not what is in the best interest of Herm Edwards and certainly not what is in the best interest of the media.

It must be rough. He is getting paid a bunch to do less work with the only requirement that he remain quiet for a while. He will get paid for next year and there is a good chance he won't even have to work it. What in the world is unfair about that?!!

By the way, he could always quit, and look for another job if he was really that concerned about it. Oh ya, but that means he wouldn't get paid by the Chiefs for next year.

In all fairness, Herm hasn't complained at all ... this isn't really directed at him, but at the people out there crying over his terribly difficult situation. I just hope someday I could be blessed with that same terribly difficult situation - that would be really cool.

(Very) Random Thoughts

I was proud to be an American yesterday. I think it was a good day for us.

I was a bit disappointed in Obama's speech ... it just wasn't very memorable for me.

I loved the last prayer at the inauguration although it's range of attitudes was strange ... starting with Thee's and Thou's and ending with informal humor. It was an odd mix, but it was the most memorable part for me.

Obama must be worn out!!

Listening to Rush Limbaugh (which I do very very seldom) make fun of the inaugural poet, saying she sounded like the lady in his GPS device that gives him instructions, was hilarious.

I'm spending time reflecting on the Sermon on the Mount right now. It's Amazing. Many of you probably know that Jesus says our righteousness can not get us to heaven because we are not perfect. But do you know that our righteousness (how well we follow the law) will be rewarded in heaven? There will be 'least' in heaven and 'most' in heaven. If you're looking for a place where everyone is 'equal', then I guess heaven isn't it. Think about that for a while.

K-State basketball has started 0-3 and as usual most people are overreacting. My estimation is that 8 of the 12 teams in the Big 12 would have started 0-3 with K-State's schedule. Only KU, Oklahoma, Texas, and Baylor might have won one or two of the three games. All we've discovered to this point is that K-State is not a great team - which anyone paying attention already knew. Whether they finish 5th or last, we just don't know yet. Give it 3 more games and then overreact.

You've lived in China too long when ...

I found some of these on Facebook and thought I'd share. If you haven't lived in China, they might be slightly entertaining. If you have, they are hilarious!

To my Chinese friends who sometimes read this blog: I love you all!!

You've lived in China too long when ...

• You walk backwards in the park listening to a transistor radio
• You smoke in crowded elevators
• All white people look the same to you
• You no longer need tissues to blow your nose
• You find western toilets uncomfortable
• You think a 30 year old woman who carries a Hello Kitty lunch box is cute
• It's OK to throw rubbish, including old fridges, from your 18th-floor window
• You aren't aware that one is supposed to pay for software
• You are not surprised to see your tap water run dark brown
• You think that a $7 shirt is a rip-off
• You have no reservations about spitting sun flower seeds on the restaurant floor
• You think it's silly to buy a new bike when it'll get stolen soon and stolen bikes are half the price.
• You feel cheated if you don't receive a full head and shoulder massage when getting a haircut
• You no longer wait in line, but go immediately to the head of the queue
• It becomes exciting to see if you can get on the elevator before anyone can get off
• You no longer wonder how someone who earns US$ 400.00 per month can drive a Mercedes
• You regard it as part of the adventure when the waiter correctly repeats your order and the cook makes something completely different.
• You are not surprised when three men with a ladder show up to change a light bulb
• You honk your horn at people because they are in your way as you drive down the sidewalk
• You have a pinky fingernail an inch long
• You think Pizza Hut is high-class and worth queueing for
• When you are able to jump the line because the idiot laowai left 1 extra inch between themself and the person in front of them
• You start calling other foreigners Lao Wai
• You start cutting off large vehicles on your bicycle
• You think no car is complete without a tissue box on the rear shelf and a feather duster in the trunk
• You go to the local shop in pajamas
• You think "white pills, blue pills, and pink powder" is an adequate answer to the question "What are you giving me, doctor?"
• Someone doesn't stare at you and you wonder why
• You wear out your vehicle's horn before its brakes
• You buy a top-of-the-line karaoke machine
• Forks feel funny
• All the top-level government officials you befriended for guanxi purposes when you first arrived are retired and living in your country
• You think of "salad" as diced apples in mayonnaise
• You only wear a suit when you dig ditches or do home repairs
• You and a friend get on a bus, sit at opposite ends of the bus, and continue your conversation by yelling from one end to the other
• You cannot say a number without making the appropriate hand sign
• You start recognising the chinese songs on the radio and sing along to them with the taxi driver
• You feel insulted when you enter a restaurant and only three waiters say welcome
• You have dreams about eating real cheese.
• You can pick up more rice with chopsticks than with a spoon.
• You believe no trip to the hospital is complete without an intravenous drip.
• You have a cat called Cat Cat
• You stop using past tense altogether.
• You finish a chicken and it looks like a vulture picked the bones clean.
• You go to KFC for a romantic dinner...
• Someone on the street says laowai and you say zai nali?
• You don't think its wierd that you can see every child's bum.
• You believe small childrens arms are perpendicular to their body.
• You think Celine Dion and Backstreet boys are NOW, and look for their songs in KTV.
• You no longer get offended when someone asks "is everyone in your country fat?" because you know it to be true.

Jesus Changes Everything

I spent some time reflecting on the Beatitudes today (Matthew chapter 5) and putting them into my own words. The words of Jesus are amazing; He changes everything!

Without Jesus

If your spirit is empty, you are not a good person and you should not lead.
If you mourn, you mourn.
If you are meek, you get trampled by the confident and pushy.
If you desire righteousness, you are never satisfied. Everything is imperfect.
If you show mercy, you are taken advantage of.
If you fight for peace, you get abused in the conflict.
If you are punished for making right choices, you have nowhere to turn.

With Jesus

If your spirit is empty and you think you just don’t have much to offer of significance, you are blessed in this very moment because the kingdom of heaven is available right now to you - not because you have earned it, but because you realize your need for a Savior.

If you feel down and have incredible sadness in your life, you will be blessed because Jesus is here now and His Spirit is available to comfort you in ways you would never have otherwise known.

If you are timid and run-down, feeling like you constantly defer to others and never get your way, you will be blessed because those who know how to submit to Jesus will in the end have the earth given into their care.

If you desire to be righteous but never seem to quite be able to get there or if you desire to see all people in the world treated justly but are frustrated that it seems impossible, you will be blessed because one day you will see the righteousness and justice you desire.

If feel like you get walked all over because you constantly show mercy and try to see the good in people, you will be blessed because one day you too will be shown mercy for all your shortcomings.

If your innermost desires are pure and you are criticized for holding to those principles even when it costs you or costs those around you, you will be blessed because that purity will allow you to see the God of the Universe.

If you long for peace and often suffer by placing yourself emotionally or physically in the middle of conflict to try to work it out for the better, you will be blessed because one day people will call you a child of God.

If you are troubled or disrespected or punished because of doing the right thing, you are blessed, even now, because the power of God is available to you in this life.

Fantasy or Vision

Hi Everyone,
As some of you know I lead a group of men that are working towards living a life of sexual purity. We study through 7 principles to help overcome our bad habits. From time to time, I write things specifically to that group on another blog. Here is one of them that I thought might be beneficial to someone else out there so I decided to post it here as well.

I was watching an episode of Everybody Loves Raymond last night (it was hilarious). In this episode Raymond and Debra face the prospect of going to marital counseling. The entire episode played on the discomfort we would all feel in that situation (and Ray's efforts to avoid it). So today I'm asking myself, 'Why are we so scared of counseling?' I think we're scared because in general we don't like to face the facts about ourselves. We'd rather deal with fantasy than reality.

The first principle most experts suggest to overcome our issues is to admit to having them. Face it, we all have issues! Before any healing is possible we must admit to the fact that we don't always live life like we wish we would ... that there are parts of our life we'd rather not talk about - parts where we've lost control and don't live like we want to. If we don't start in the rather uncomfortable place of admitting our issues, we stand very little chance of changing.

This is our choice. We can start from a mindset of fantasy where we make up our own reality to be whatever we want it to be. Or we can start from a mindset of vision where we view our self accurately and have a vision of what the future may hold for us. Our mindset will go a long way to determining how we live. A mindset of fantasy leads to drifting wherever our mind takes us, making decisions that satisfy the moment but may have negative long-term consequences, and developing undesirable habits that are hard to break. A mindset of vision leads us to taking control of our mind, making decisions that take us where we want to go, and developing habits that will shape us into people we can be proud of.

So step one: Will you choose fantasy or vision? Will you take time to discover your issues or continue through life with your head in the sand? Everything else depends on this decision.