Chuck Flunks Public Finance

Chuck Schumer seems like a nice enough guy, but he's got some explaining to do. Sunday night on CNN Late Edition, Schumer had this to say in an exchange with Wolf Blitzer about steps the Federal Government should take to alleviate the financial crisis:

SCHUMER: ...We also believe there ought to be some help to the states. The states are now in real trouble and if they're not helped, they're going to do one of two things. They're either going to raise taxes or lay off tens of thousands and cut back on very vital and necessary programs, neither of which would be good for the economy in a recession.

Could it be that Senator Schumer is trying to put one over on the American People. Let me explain: He's claiming that it's either a second stimulus package or increased taxes. But everyone knows that any government expenditure represents future taxes, unless he thinks the Treasury will simply print the money. Is he asserting that taxpayers won't have to pay for another passed stimulus package? What a painless alternative to taxes! The government can just pay for it!

But there is, of course, one small problem: the Government doesn't have any money it hasn't printed or taken from someone else. It produces no wealth, contributes nothing to the productive energies of the economy. The Federal Government raises money by taking it (we call this taxation) and by printing it (we call this inflation). It only shuffles and rearranges, hoping we lose track of where it all went. And that's exactly what Chuck Schumer and others are banking on - that we lose track of the fact that it will all have to be paid for and that we will be the ones footing the bill. Senator Charles Schumer owes us an explanation, what'll it be Chuck?