At this point, almost everyone is saving money and deferring spending because of the uncertainty that exists with regards to employment, housing values and the equity markets.

The economy cannot make a meaningful turn until the consumer is comfortable in their own long-term well being.

The government does not make sunlight or harvest sunlight or save sunlight. It can only have sunlight that is harvested by someone else. It confiscates and “redistributes” with some level of inefficiency.

It can confiscate from those that plant and harvest and give to those that don’t as long as some continue to plant and harvest. When producers decide it is not worth it to work while others benefit, the government will have nothing to redistribute.

That is the fallacy of big government. Big government does nothing but take from producers what producers are willing and able to give. At some point, why bother if ones labor and effort will just be confiscated anyway. (I guess that is why I have always liked the movie Dr. Zhivago. It makes this fallacy clear.)

When the government trys to “control” health care costs or transportation or crop production, more effort is diverted from production to control and there is, therefore, less produced to control. If it wants to reduce the cost of health care, the government needs to incentives more production of health care and remove impediments. The marketplace will adjust the cost of an abundant supply.

Of course, all the Keynesian economists that have emerged from the woodwork have made it quite clear that the stimulus is ‘necessary.’ I guess even if much of it isn’t spent immediately. Frankly, I understand the Fed’s current stance and the measures they have taken. I just don’t think that temporary distributions of capital, filtered through inefficient government bureaucracy, will do much good – increased personal savings or no.