Stimulate: to excite to activity or growth or to greater activity.
A simple definition don't you think. I was contemplating the word stimulate a lot today, mostly because of the term or phrase " to stimulate the economy ", a phrase heard a lot in this day and age. Of course thinking about it made me consider rather deeply in my mind of what exactly does stimulate mean to me. The definition provided by Webster's dictionary is alright I guess, it is quite concise in it's definition, but that definition seems so stale, it doesn't give any passion to the word, the definition of course is correct, after all it comes from a prominent dictionary, however it does not leave a visual impression for the word. It has no soul to it. What I had in mind when I was thinking of the word, I was looking to have more passion in my head when thinking of the meaning. Then again, context is always important when trying to define a word is it not ? There should be some excitement, images of movement, blood rushing, chaos, various forms of activity, things that would draw an immediate impression in our brains of the idea of stimulate, so let me try and draw some analogies of what I think to stimulate really means.
Being a man one of the first things that came into my head considering that this is summer, it's the weekend, and it has been very hot was a beach. White sands, deep blue water, and lot's of bikini's. Young firm tanned legs, curvy hips, ........... if your a seeing this ( I presume there is a smile on many a man's face right now ) in your head, there is a form of stimulation with just the brief mention of this scenario I am sure. Men with sunglasses lowering there head to get a better view, or starring at the water pretending to look at the boats, and other watercraft, we all know that nothing can be more satisfying than laying on a towel, warm sand underneath, and just laying around watching pretty young ladies strolling around in the sand. Senses are heightened, and smiles are everywhere.......... stimulating.
For the female audience ( and trust me I am only using this example from direct testimony ) let us imagine a movie scene. Viggo Mortensen walks into the room with a flannel shirt and a pair of jeans. Stops looks in the mirror, takes his tucked in flannel shirt, slowly pulls it out of his jeans and starts with a bottom button and unbuttons the bottom button. Then the next one, as the flat stomach starts to show, and the navel appears, there appears a glimpse of a trail of hair........... okay enough of that........... I think we get the picture STIMULATION............. and to what degree ... I don't want to know... but in fairness to Women......... we get it............
The point I am really trying to make is that government by it's nature has no power to stimulate anything. In order to put money into an economy, that money must be taken from somewhere else. It would be in the form of a tax, which goes into the Treasury. Or there is a bond issued, which would then require a tax from the economy to pay the bondholder later. Government is an enterprise whose sole and exclusive purpose is force. As George Washington was quoted as saying " Government is not reason, it is not eloquence, it is force " and in order to force the people to which they govern to pay for an enterprise to stimulate an economy as they there rulers deem fit, is to misunderstand what the nature of an economy is. By ignoring the importance of the price mechanism in the economy, more importantly the price mechanism of the interest rates in the economy, there is a false signal being sent to producers on the demands of consumers and the preference they have for goods. This false signal then encourages building and production that would otherwise be ignored because there would be a loss of profit in making these goods, or offering certain services. Only a Central Bank, that has the ability to print money, or to provide as Central Banks like to say " liquidity " in the economy can alter the true nature of an interest rate, that however is the miscalculation that causes severe recessions, and ensures depressions.
Guess what........ the Federal Reserve is pursuing such a policy now........... in fact publicly maintain a policy of near zero interest rates until around 2013 according to the latest Open Market meetings. More misallocation of resources, and miscalculations, coupled with the mistakes made in the middle of the last decade. Not a pretty picture, and certainly not a pretty sight. More importantly not a rosy outlook for the future. That is unless more citizens are willing to fight for the necessary change that needs to take place. As always the future, and it's fate is in our hands.
