Another World

    It seemed like a normal morning.  I didn't notice anything
unusual happening, like falling through a looking glass.  It
wasn't until I checked out the Internet that I realized something
was terribly wrong.

     First I found an article about a magic solution for the
problem of local governments that have unfunded pension
liabilities.  Translated into English "unfunded pension liabilities"
mean they have promised to pay pensions and don't have the
money to pay them with.

     The Michigan legislature is considering a new law to
solve that problem.  The law would allow local governments to
borrow money to pay off their obligations to the pension funds. 
Then the local governments won't owe anything to the pension
funds.  Why didn't I think of that?

     When the bonds are due perhaps the governments can
borrow from the pension funds to pay off the bonds.  Someone
needs to make a study, at the taxpayers' expense of course, to
see how many times this debt must chase it tail around the circle
before the debt, like the gingham dog and the calico cat, just
disappears.  Pay attention to this one.  If it works for
government it might work to eliminate your debt too.

     Or, maybe not.  Perhaps only those with the god like
power of politicians can make it work.  It was the next article I
found that drove home the reality that I had slipped into some
kind of parallel universe where up is down, black is white, and
debt is wealth.

     The master magician, the Obama guy, discovered a magic
solution to food shortages caused by the drought.  He wants the
government to buy food and give it away.  Perhaps this solution
came from his magic Teleprompter.  I can all but see Obama
staring into his Teleprompter chanting "Teleprompter on the
wall, tell me I'm the fairest president of them all."

     Perhaps Obama is extending the principles of Keynesian
economics.  In the gospel according to Keynes there is a
multiplier effect.  When government spends a dollar it magically
creates more than a dollar's worth of wealth.

     If this really works, we should give every dollar we have
to government.  Spending and respending those dollars would
soon produce so much wealth it would crush us.  That crushed
by wealth problem still needs a bit of work.

     In the world where I used to live the studies show that
the multiplier effect is real. Unfortunately the multiplier turns out
to be less than one.  When government spends a dollar wealth
shrinks to something less than a dollar, perhaps fifty cents.

     Perhaps the mistake has been applying the multiplier to
money instead of food.  Maybe every chicken government buys
will turn into two chickens.

     In fairness to Obama he wasn't promising more food.  He
wanted farm votes and sought them by proposing to have the
government buy more food. That might push up food prices and
temporarily benefit some farmers.

     Before promising to raise food prices Obama might be
well advised to count the number of voters who buy and eat
food and compare that number with the number of farmers.  Oh,
wait, I missed something.  Obama is most likely counting on the
votes of the people who get the free food.

     In a world where less than half the work force actually
produces something we can consume, the free food vote could
be enough.  Back on the other side of the looking glass where I
used to live, a couple of people would have asked, How much
food can government buy and give away before there is no food
left?

     Of course, politicians are far too busy with important
things to waste their time on such silly questions.  They don't
even have time to ponder, How many medical services can we
give away before there are no medical services to give away?

                                 * * * * *
                                  * * * *
                                   * * *
                                    * *
                                     *
Copyright 2012
Albert D. McCallum
18440 29-1/2 Mile Road
Springport, Michigan 49284