Monday, February 9, 2009

Economic Stimulus Plan, or Government Ponzi Plan

The Senate has been debating the economic stimulus plan over the past week and it looks like a vote is going to happen in the next few days. As the price tag started to get closer to $1 Trillion I asked myself, how can we afford this?

At the same time as this plan has been debated, the story of Bernard Madoff has been in the news. Mr. Madoff has orchestrated a $50 Billion Ponzi scheme. For those of you who do not know what a Ponzi scheme is, it is the process of paying off investors with subsquent investors' money. The plan works as long as the number of investors or money invested continually increases. But if that doesn't, the whole thing falls apart.

How is this Stimulus Plan different than a Ponzi scheme? We are using the taxes from the next generation to pay for our stimulus. Not a bad idea unless we increase the number of investors. So in order to keep this going, the American people need to start having more kids. That is something to think about this Valentine's Day weekend.