Plurping us to death
THIS! This is what I’m talking about when I say Keynesians believe you can pass a law that food must appear on people’s tables every night.
Every $5 in new SNAP benefits generates $9.20 in an additional community spending,” the USDA contends in their outreach guidance. “If the national participation rate rose five percentage points, 1.9 million more low-income people would have an additional $1.3 billion in benefits per year to use to purchase healthy food and $2.5 billion total in new economic activity would be generated nationwide.
Keynesians are like those gullible folks who believe the ads trying to get them to buy plans on how to power a car with water. It’s true that water is made of hydrogen and oxygen which can be burned for energy. The problem is you have to use more power to separate the two from water than the energy they generate when you burn them which recombines them back into water. Hydrogen and oxygen, only while separated, have potential energy that is lost to heat once it has burned and combined into water again. The overall loss is inevitable due to imperfect efficiency. Even if your conversion were somehow perfectly efficient, you’d only get back exactly the energy you put into it, which represents no benefit at all.
It’s like they studied just enough science to make it through the high school experiment where you separate water into hydrogen and oxygen via electrolysis and stick a lit splint into the test tube of hydrogen and it burns and goes “plurp”. Meanwhile, they never got around to studying the Laws of Thermodynamics, which are, let’s just say, kind of important.
Consequences of the Laws of Thermodynamics
The laws of thermodynamics tend to be fairly easy to state and understand … so much so that it’s easy to underestimate the impact they have. Among other things, they put constraints on how energy can be used in the universe. It would be very hard to over-emphasize how significant this concept is. The consequences of the laws of thermodynamics touch on almost every aspect of scientific inquiry in some way.
Meanwhile, Keynesians know just enough economics to hang themselves and the rest of us along the way for similar reasons. They haven’t bothered to familiarize themselves with the Broken-Window Fallacy, or else just decided to ignore it because it didn’t suit their fantasy view of an economic model where someone at the top just pushes buttons and fixes everything. Now, I realize I’m stretching the primary point of the Broken-Window Fallacy which addresses the absurd belief that damage to infrastructure can have a net benefit to the economy. But the basic point remains — that you can’t achieve an overall benefit to an economy by taking resources out of it and then putting them right back in somewhere else when the very act of moving the resources in this manner uses up resources. This is inevitably a net loss.
I’m not trying to poo-poo the benefit of food stamps to make sure the poor get fed–not right now, anyway. Let me just concede for the moment that it may be a necessary and hopefully temporary evil to help people in need only because I don’t want to get sidetracked into another subject. However, if you think broadening the food stamp program will actually have the added benefit of stimulating an economy, as is referenced in the article above, you have failed to read or grasp this basic principle which is as important an idea to economics as the Laws of Thermodynamics are to science. It’s like saying we’re going to make everyone financially better off by taking resources away from some people and then giving resources back to other people but in smaller amounts. They have to pay all those paper-pushers and bureaucrats after all, and as with any government program, that usually costs more than the benefits going out to recipients. The bureaucratic costs in this case are analogous to efficiency loss in the energy-conversion example, significant losses at that. They’re spending 2.5 million just on ads before even considering the administrative costs!