Sunday, December 18, 2011

An Imaginary Article.....

Bill O'Reilly Accuses God of Class Warfare.

After reading the Magnificat, attributed to Mary the mother of Jesus in the first chapter of the Gospel of Luke, O'Reilly accused God of "encouraging the redistribution of wealth" and thereby "punishing job creators everywhere."

"I can't believe this," said O'Reilly. "These ideas are anti-conservative and therefore downright un-American. If God had been around in the 1950's, He would have been blacklisted."

The Magnificat

46 And Mary said,
"My soul magnifies the Lord,
47 and my spirit rejoices in God my Savior,
48 for he has looked with favor on the lowliness of his servant.
Surely, from now on all generations will call me blessed;
49 for the Mighty One has done great things for me,
and holy is his name.
50 His mercy is for those who fear him
from generation to generation.
51 He has shown strength with his arm;
he has scattered the proud in the thoughts of their hearts.
52 He has brought down the powerful from their thrones,
and lifted up the lowly;
53 he has filled the hungry with good things,
and sent the rich away empty.
54 He has helped his servant Israel,
in remembrance of his mercy,
55 according to the promise he made to our ancestors,
to Abraham and to his descendants forever."

Saturday, December 17, 2011


I am so happy that I have completed the music for the documentary "Where Did The Horny Toad Go?"!

This project took around a year, off and on, to complete. I am grateful to the patient filmmakers who understood my time/energy constraints.

It felt absolutely wonderful to hand over the drive containing the music to Stefanie Leland last night!

I hope to write a couple of blogs sometime soon to describe the process of watching the film, imagining music, thinking of the pacing, recording demos, recording again, editing, mixing, etc. It was a lot of work, but it's work that I love to do.

The film music consists of 37 different tracks. All together it's around an hour's worth of music. I will be releasing it in album form sometime in 2012, but I will condense it down to around 25 tracks (40 minutes in length), since several of the movie tracks are quite similar to each other.

The orchestration of the music consists of acoustic guitar, mandolin, cello, violin and melodica. And shakers make one appearance (in the music for the opening credits described below).

Here is an unmastered sample. This is the music for the opening credits, a minute and a half in length, which features two of the main musical ideas of the film. The first is the music of the horny toad - quirky, playful and a bit wild. The second is the music of childhood and the memories of those who remember interacting with these fascinating creatures. Thanks for listening!

Sunday, November 27, 2011

Christmas Came Out Of A War.

I wrote and recorded this song in December of 2007. At the time, the Iraq war was in my thoughts. This year the "occupy" movement, and accompanying discussion, has led me to listen to the song again with slightly different ears.

There were a few little lyrics mistakes in the singing which I just corrected. I like it better now!

For those who have heard this song enough already, I shall try to scratch out a new Christmas song soon (since, you know, there are clearly not enough of them....)

Special thanks to Beth Swales for beautiful harmony vocals!

Merry Christmas!

Christmas Came Out Of A War (unmastered) by stevenstarkmusic

Get A Job!

‎"They need to get jobs. They are annoying. They just enjoy shaking things up for its own sake. They are dirty. They need to do something productive."

- an imagined discussion between Roman citizens concerning Jesus and his followers.

Tuesday, November 22, 2011

The Cherokee Strip - a Tale of an Oklahoma Boyhood by Marquis James

My rating: 4 of 5 stars

If you grew up in Oklahoma, and particularly in Northwest Oklahoma, and even more particularly in Enid, OK - then this book should interest you greatly.

James recounts his boyhood living on the claim his father staked in the Land Run. Later, his family moves to Enid as he attends Enid High School (originally housed in a downtown building alongside an opera company!), and he begins his career in journalism working as a reporter, a subscriptions manager and a printer in Enid's various papers.

The most remarkable part of this book is the amazingly quick change that the town of Enid undergoes. At the beginning of the story it is a frontier, wild-west, tent city complete with saloons. By the end of the story, a scarce 10-15 years later, it is a brick-building town with a $"100,000" courthouse at the center. It has essentially transformed into the town it is today.

James is an entertaining personality, precocious and energetic. Enid's two-time Pulitzer prize winning author is a wonderful narrator throughout.

Blog Adventures - Good or "Good"?

I am getting into a bit of trouble over here in the comments section of Baptist pastor Wade Burleson's blog. Wade leads Emmanuel Baptist Church in Enid, OK.

I realize many readers of this blog question Christianity, particularly conservative Christianity, in terms of epistemology. People often judge their religion's truth by different methods and standards than they do many aspects of everyday life - this is called compartmentalization. This is an essential topic to discuss. But I am even more interested in moral compartmentalization, where some believers attribute actions to a "good" God that they would never consider good for themselves or for others. When this happens, when the word "good" is divorced from what we consider to be good, then the word loses its meaning.

As a former Baptist who grew up in the town of Enid, this is the angle I take when occasionally dipping my toe in here. Wade is smart fellow, a historical scholar, and a nice guy, so he, and the other fine folks folks commenting, are fun to interact with.

Thursday, November 10, 2011

The Goat Rodeo Sessions

Don't you just ADORE stringed instruments?

Wednesday, October 5, 2011

Little Dragon - The Eyes Have It

LD: Why do women put limes on their eyes?

ME: Ummmm. When do they supposedly do this?

LD: You know, when they lie on a table with mud or something on their faces, and they have limes on their eyes?

ME: Oh OK, like at a spa or something?

LD: Yes!

ME: Those aren't limes. They are pieces of cucumber.

LD: Oh!

ME: Limes would really sting!

LD: Yeah, I guess so.

(both of us laugh)

LD: So.....why do women put cucumbers on their eyes?

ME: I have no idea.

Thursday, September 22, 2011

Little Dragon Likes to Eat.....

ME: (smelling a delicious dinner that LD's mom is cooking) So what's for dinner?

LD: Barbecue bison sandwiches and twice-baked potatoes.

ME: That sounds GOOD. (It's 7PM and I am hungry too....let's talk more about food) So what is your favorite food of all time?

LD: Well, that would probably be a tie between 20 or 30 different foods. It just depends on what I am in the mood for.

ME: Sure

LD: But one thing that I am always in the mood for is doughnuts.

ME: Yeah, doughnuts are good.

LD: And snails.

ME: (pause...analyzing for sincerity) Really?

LD: Yes, they are so good. You just have to pretend that you are not actually eating snails cooked in butter.

ME: Does your mom make snails or do you usually get them at a restaurant?

LD: If my mom could make snails, I am pretty sure that we would have them everyday.

ME: So a restaurant then?

LD: Yeah, there is this restaurant in Michigan, by my summer camp, that makes them.

ME: Nice. So they have a good French chef there?

LD:'s not French...

Tuesday, September 13, 2011

Little Dragon - Holy!

ME: The note that gets four counts is called the whole note. And it's called that because it takes up the WHOLE measure in a 4/4 time signature, not because it looks like a hole.

LD: OK, so it's not called a whole note because it looks like the hole my dad dug in the front yard that went too deep and he hit a pipe and then our toilets didn't work.

ME: Exactly.

I guess whether it's "whole" or "hole" somebody ends up having to hold it.

Little Dragon - Spicy!

LD: Can I play you a song on my recorder?

ME: Sure!

(LD starts putting it together)

ME: That's a big one. Is it an alto?

LD: Yes, it is an alto. I can also play the other one though, the......uh.....the jalapeno one.

ME: (Blank stare) Oh! Do you mean the soprano one?

LD: Oh yeah! (giggles)

Next time I want to hear some salsa music, I am going to find a virtuoso of the jalapeno recorder.

Wednesday, August 31, 2011

Little Dragon - Yahweh or No Way?

ME: (strumming through the Plain White T's song "Hey There, Delilah" which LD is learning) "Hey There, Jezebel....Hey There, Esther....Hey There, Bathsheba...."

LD: Ha ha! Is Bathsheba really a person's name?

ME: Sure. She is the woman in the Bible that King David fell in love with. Then he sent her husband Uriah to the frontline of a battle, hoping that he would be killed, which he was. Then David married Bathsheba.

LD: What? That is terrible!

ME: He did get punished.

LD: OK, good. I was thinking that would be really weird if he didn't.

ME: Yeah, this prophet named Nathan came to him and said that God was angry. Then King David's baby died as a punishment.

LD: What?!

ME: Yeah, sounds like more of a punishment for the child than for David, huh?

LD: Yeah! I hope that was on Nathan's orders and not God's.

ME: No, it was on God's orders.

LD: WHAT?!!!!

ME: At least according to the Old Testament writer.

LD: That is terrible. Why didn't God just make David's wife not love him or something? Why kill his child?

ME: Yeah, I know!

LD: I tell you what, if I was that baby, I would not want to go to heaven. I would definitely rather go to the other place. I mean, He just killed me!

ME: I hear ya.

LD: If someone just killed me, I would not want to hang out at his house.

ME: I understand. But remember, not everyone believes that the Old Testament is exactly right about what God is like. Many people believe it was written by humans and therefore is not exactly perfect.

LD: Yeah I mean, if God really did that, he should be taken down and replaced with some other God from some other religion.......though I don't know who exactly that would be.

ME: I agree! OK, so back to "Hey There, Bath...I mean... Hey There, Delilah"!

I can't help but notice a parallel in Scripture to LD's pronouncement against this concept of God. In Psalms 82 God takes his place in the divine council and judges the other gods. He does not condemn them because they are gods of different peoples, less powerful, or competition. Rather he judges them because of their inability to "give justice to the weak and the orphan; maintain the right of the lowly and the destitute." "The foundations of the earth are shaken" because of the injustice over which they preside. This is stirring imagery - right to the bones of the world! As John Dominic Crossan says, "they are dethroned for injustice, for divine malpractice, for transcendental malfeasance in office."

It would seem that LD agrees with the author of Psalm 82 that might does not make right - whatever name, mental image or association one might ascribe to it. For King David's child to die because of David's sin is not a just punishment by any rational accounting of justice in the modern world. David did not "maintain the right of the lowly", but in this story, neither did God.

Psalms 82 not only suggests how we might judge ourselves and our leaders, but also how we might judge different concepts of God.

Friday, August 26, 2011

Little Dragon, Arrrrr!

LD: This kind of sounds like a pirate song.

ME: Yes, you're right. Yo ho ho and a bottle of rum!

LD: You know what the funny thing is?

ME: What?

LD: Kids don't really drink a lot of rum.

ME: Hmmm, no.

LD: I wonder why that is?

ME: I don't know.

LD: I guess we just have to chew GUM instead. (grinning) GUM RUM! GUM RUM! GUM RUM!

ME: OK, so back to our song.....

At least it wasn't REDRUM!

Tuesday, August 23, 2011

LD Transforms

ME: Okay, let me hear an E chord.

LD: I have pretty solid proof that I am a werewolf.

ME: (all thoughts of E chord fading) Oh....really?

LD: (looking dreamily at the wall) Yeah.

ME: So what is this evidence?

LD: I always wake up with the covers to my bed all bunched up. And I have scratches all over. And my brother always wakes up really hungry in the morning, but I am never hungry.

ME: Sooo, you think maybe you've...eaten something during the night?

LD: Maybe. Oh, and this morning I woke up with my watch missing, and I found it in the front yard. I guess that's it.

Pretty solid.

And we did finally get around to that E chord.

Wednesday, July 27, 2011

Little Dragon Stands By Me

LD: Hey, I listened to that song!

ME: Which one?

LD: The one by Robert E. Lee.

ME: (scanning my memory for any Civil War songs I have taught in the luck) Robert E. Lee?

LD: Oh E. King!

ME: Ah! "When the night has come, and the land is dark....."

Thursday, July 7, 2011

A New Letter to Tom Coburn

Mr. Coburn, July 7, 2011

I was thrilled to receive your phone call on Monday, June 18. I reported our discussion to many friends, and, whatever their political opinions, they were all impressed that a sitting United States senator would engage a constituent as you have done.

I appreciate the Hayek recommendation. I am working my way through “The Road To Serfdom”. His opening sentiment, that extreme collectivism can lead to totalitarianism, is certainly something I can sympathize with. Surely both extreme socialism and libertarian anarchism are destined to end this way when put into practice. Such is human nature. I will write another letter when I finish the book.

Because of the ongoing debate about raising the debt ceiling, I thought I would write another letter with a few points that might help to further a discussion on these macroeconomic topics. Also, although I am enjoying the Hayek (and I hope you may have found time to browse “The Seven Deadly Innocent Frauds of Economic Policy” by William Mosler), ultimately what is compelling in a discussion is to argue the points themselves. Great thinkers have laid the groundwork for us all, but to appeal to them is to appeal to authority rather than to the ideas themselves. I would be very interested in being presented with faults in my reasoning below. I doubt any of us is perfectly right, so hopefully we can help each other correct and refine our thinking.

This letter is a little longer than I had hoped it would be. But I have organized it into five points so that each point can be considered separately. In addition to sending it to you, I am publishing the letter on my blog at, so I hope that this organization will make it easier on readers who are quite busy.

POINT ONE: We must asked ourselves if everyone wants a better economy and higher employment right now.

Republicans will surely benefit from a high unemployment rate in the 2012 elections. This is not a personal indictment of anyone’s integrity, rather it is an acknowledgement of our human nature. We want to win.

Also, corporations have been able to lift profits while sales remain low. All the articles I have read attribute current corporate profits to making do with less - working existing employees harder, keeping wages from rising, and squeezing more profit margin out of low volume. And the threat of the long unemployment line keeps employees from having other options. The Labor Department reports that annual average productivity rose by 3.9 percent in 2010. But unit labor costs fell during the same time period by 1.5 percent. Compensation is not rising with rising output. Here is a recent quote from the chief economist of the US Chamber of Commerce.

"We've been able to generate record profits on very, very low volume and very weak economic growth," - Martin Regalia.

And corporations who are hiring are doing so abroad. But why? Here is an interesting quote from Jeffrey Immelt, GE's chief executive. In a recent speech in Washingon he said, "We've globalized around markets, not cheap labor. The era of globalization around cheap labor is over. Today we go to Brazil, we go to China, we go to India, because that's where the customers are."

In 2000, 30% of GE's business was overseas; today, 60% is. In 2000, 46% of GE employees were overseas; today, 54% are. In short, demand in the US remains low, while corporations are leaning on foreign markets and higher domestic productivity. And workers have few options, giving large firms more leverage over their workforces.

However small businesses are not sitting on the cash reserves that major corporations are. They maintain high levels of debt by historical standards and need more customers pronto. Remember that small businesses employee over half our citizens, and they are responsible for over 64 percent of new jobs created from 1993-2008. In short, they have been the engine of our economy, and many of them are running out of gas because of low levels of aggregate demand here at home.

POINT TWO: Only more spending can raise employment.

We agree on this, and we agree that more spending in the private sector will occur when there is more confidence in the economy. However, if we reduce federal deficit spending now, we reduce sales, and therefore we reduce jobs. How will even higher unemployment (the immediate result of any decrease in spending, federal or otherwise) stimulate confidence and more investment? If businesses are worried about a weak economy, how will making it weaker make them less worried?

The private sector is reducing its debt levels, but it can only do so as long as the public debt rises. If the two attempt to deleverage at once we will see the aforementioned drop in aggregate spending (even lower demand) which will decrease sales and jobs.....and confidence.

POINT THREE: We should not put the private sector into deficit right now.

And this would be the logical result of eliminating the government’s deficit. Remember, the government’s deficit is the private sector’s surplus, and the government’s surplus is the private sector’s deficit. The third wheel in this is international trade, but that has been in deficit for a long time, so it is not adding financial resources into the mix (although it is adding real resources).

But is there a danger in more deficit spending by the United States government?

First of all, we often hear the phrase, “We’re spending more money than we’re taking in!” when describing federal deficit spending. But since the federal government has sovereign control over its own currency, a better way to describe deficit spending is, “We are creating more money through spending than we are destroying through taxation.”

I believe we agree on this description of how net financial assets enter the economy. And we agree that the risk of too much deficit spending is inflation. I think the common explanation for inflation is “too many dollars chasing too few products around”. But the key word here is “chasing”.

Dollars must be spent for inflation to enter the equation. Too many dollars sitting around, but not chasing around products, will have little effect on inflation. We have seen evidence of this over the last few years. Bank reserves are high, yet inflation has remained low. So inflation, the demand-driven kind that people fear from too much deficit spending, is not caused by too many dollars but rather by too many spent dollars (demand). And demand is low right now.

Imagine that another trillion dollars has just entered into the economy. Will it be inflationary? Perhaps. But now imagine that it has entered the bank account of one miserly trillionaire (J.P. Rockefeller Scrooge) who will not spend a dollar of that money. And remember, bank reserves are already high. This money will not be lent because the problem is a lack of credit-worthy customers for loans, not a lack of money to be lent out. So the money will sit. Surely prices will not react to adding to this stockpile of unused bank reserves. Now replace “J.P. Rockefeller Scrooge” with U.S. corporations.

What would be the difference?

Dollars are simply IOU’s, not commodities in themselves, and if they are sitting disproportionally in the hands of those who do not need to spend them, then as far as inflation goes, they may as well not exist.

So what happens if people do start spending all these dollars? What if the government spends more and then corporations gain confidence because of rising demand (more customers) and rising employment, and they start spending more? Would inflation start to creep up alongside rapidly rising employment and strong GDP growth?

Perhaps it would, if our economy is restored to its full productive capacity and the demand for products begins to exceed our ability to produce them.

But this does not sound like a nightmare at all. It sounds like exactly what we all want to happen. And if inflation starts to get out of hand, the Fed can manipulate interest rates or the government can raise taxes to drain excess demand out of the economy.

To be clear, we are probably in for some inflation because of rising worldwide demand for finite fuel sources and corresponding speculation. But surely we would rather approach this oncoming plight with a vibrant economy rather than a stagnant one. Maintaining high levels of unemployment to fend off potential inflation makes little sense in real terms.

And of course, fears of hyperinflation are unfounded. It’s usually just presented as a slippery slope argument. If more deficit spending right now makes hyperinflation more likely, then running a surplus makes the complete drying up of all dollars and the collapse of the United States economy into a deflationary spiral more likely.

Balance is everything.

POINT FOUR - Long term unemployment is the real tax on future generations.

Sustained high unemployment is costing us investment in our future. Our human capital, our time and our energy, are not being fully utilized to solve the problems of tomorrow. For example, can we really believe that underinvesting in efficient energy, better roads, science and education - in the name of deficit reduction - will put us in better shape a generation from now?

I am not advocating for big government per se, but I am advocating for the government to simply do its job of providing the necessary fuel to facilitate a vibrant private sector. I am speaking of protection for people and their businesses, education for tomorrow’s work force, roads to allow movement of goods and resources, and other public goods. And of course, the private sector must have enough financial resources in the right hands to keep aggregate demand at the required level to facilitate our economy’s full productive potential.

We also must also consider the societal effects of long-term unemployment. Those who go without jobs for long periods tend to have diminished skills, and when they do finally find a job, it may not be one that matches their skill set. This results in a loss of human capital. Chronic unemployment is also very difficult on the family unit, causing depression, money problems, health problems, etc. Crime rates can also rise alongside the growing desperation associated with long-term unemployment. Nourishing environments for raising children become more fragile.

POINT FIVE - If more direct public investment in the infrastructure of the private sector is off the table right now due to the political climate in Washington, then why not a huge tax relief package targeted at every single working American?

I am speaking of a payroll tax holiday. The payroll tax is regressive, proportionally affecting lower income workers much more than higher income workers. This sweeping tax relief would lead to more money in the pockets of people likely to spend it. This would assist families in need and provide a huge boost to the current level of aggregate demand. More spending would create more sales which would create more jobs.

The rich and the corporate leaders sitting on mounds of cash can afford for the economy to be in a lull. But adults in unemployment lines and children in soup kitchens cannot afford it so well. High unemployment drives economic inequality in society and exacts a large toll on our nation’s families. Let’s give our citizens, and our nation as a whole, a greater chance for success through the largest tax relief plan in decades targeted to those who can and will use it the most.

Thank you so much for your time and energy. I wish you the very best.

Your concerned constituent,

Steven Stark

Monday, July 4, 2011

Happy 4th of July

I enjoyed singing the hymn "This Is My Song" at Mayflower Congregational yesterday. The words were written in 1934 by Lloyd Stone. It is sung to one of the world's great melodies - "Finlandia" by Jean Sibelius.

This is my song, Oh God of all the nations,
A song of peace for lands afar and mine.
This is my home, the country where my heart is;
Here are my hopes, my dreams, my sacred shrine.
But other hearts in other lands are beating,
With hopes and dreams as true and high as mine.

My country's skies are bluer than the ocean,
And sunlight beams on cloverleaf and pine.
But other lands have sunlight too and clover,
And skies are everywhere as blue as mine.
Oh hear my song, oh God of all the nations,
A song of peace for their land and for mine.

Monday, June 20, 2011

Tom Coburn Update

I was driving home from work this afternoon and my phone rang. Thinking it might be the company I was hoping would make it out to fix our AC (they didn't :( ) I picked up while still driving.


"Is this Steven?"

"Yes, it is."

"Steven, Tom Coburn."

Yes it was. I pulled over as quickly as I could and we had a 20 minute discussion about macroeconomics. I am incredibly impressed that this United State senator took the time to call a constituent for a discussion. Wow! Seriously, that is just phenomenal. It's how it should be, but we all now how busy everyone is and how many people our Senators represent.

Despite being caught off guard, I feel I was decently cogent. He spent most of his time discussing the need for confidence in our economy and worrying about inflation. Of course I brought up many points concerning the need for more spending in our economy. He agreed, but he thinks that the more than two trillion dollars currently sitting in the coffers of corporations will be spent when they have more confidence in the stability of the dollar and our nation's debt to GDP ratio. (He didn't say this exactly, but this is the gist of it. I sincerely hope I am representing his position correctly). Of course, I asked him why a company would invest in more workers and products when the economy is weak and sales are down, despite whatever our deficit happens to be. "Why would a company hire workers they don't need?" was my main question. He said that companies could be selling more right now, but they just aren't willing to take the risk on more investment right now.

Of course I disagree. If customers are demanding a company's products, companies will respond by making more products.

We also disagreed on how more government spending would affect the economy. He maintained that more government dollars being introduced into the economy right now would only increase the number of dollars and not the number of real products and services. While I am very, very pleased that he is focusing on real goods and services and not just the dollars which represent them, I am mystified as to how this would work. If unemployment is at 9%, surely no one is thinking that our nation is anywhere close to full productivity. More spending creates more sales which creates more jobs. And we have people ready for those jobs, ready to create more goods and services.

So I am not sure why he thinks more government spending right now would result in inflation and not greater productivity. And of course we would all love for companies to just start spending out of the blue, but once again, the poor economy makes people hunker down and save, which of course keeps the economy poor! Only the federal government has the ability to spend counter-cyclically, when confidence is down, which can create more spending and more jobs and then more confidence. Confidence is the symptom of a good economy, which can then turn into a cause.

Of course, I know how this may sound to some, but I do not feel that I am a proponent of "big government." I don't think the government should overly involve itself in people's private lives, from who they marry to what plant they smoke to how they spend their money. I just think the government should do its job, acting as a source of fuel for the engine of the private economy. And no one doubts that the government is source of our currency (the "fuel"), which is required for spending. The government should step up its spending when the private sector needs that spending to maintain and grow its ability to produce. And, of course, all public spending ends up as money in the pockets of private individuals.

Mr. Coburn asked me to read some Hayek and I asked him to browse through Warren Mosler's online publication "The Seven Deadly Innocent Frauds of Economic Policy", which can be found here. Then he asked me to write him another letter after our reading, and he promised me another call.

So cool!

Saturday, May 21, 2011

My Reply to Senator Coburn

Here is my response to Senator Coburn's letter in the previous post. I do not make any claims of expertise in the field of macroeconomics. I am doing my best to understand, and I challenge everyone to pursue knowledge on their own from multiple sources. One thing I do feel strongly about is that our common sense about these matters can only be trusted when we understand the context correctly, and federal debt is a different animal than household debt. Therefore our common sense about our own household budgets alone is not enough when considering the federal budget.

Senator Coburn,

Thank you for the thrill of interacting with you on these vital economic issues! Although I disagree with many of your positions, I have always felt that you genuinely care and that you are a thinker. I hope that you will prove me right by giving the following ideas more consideration. As the father of two young children, I am deeply concerned that our leaders, such as yourself, will inadvertently shortchange our nation's future by pursuing a path of spending austerity, freezing the vital investment in our future that needs to be made now to insure American competitiveness for the coming generations.

You repeatedly claim that deficit spending by the federal government does not create jobs. I believe that this claim is false. For instance, the Congressional Budge Office states that millions of jobs and multiple percent GDP growth has come from the stimulus. One can search through the details at the following link:

Government spending creates jobs by introducing new demand for goods and services into the economy, first by the government itself. Then the dollars paid for those goods and services do not disappear into thin air. Rather they end up as private assets in people’s pockets. When those dollars are spent, it continues that increase in demand, stimulating job growth in the private sector. Government spending may not be politically or aesthetically pleasing to some, but it is incoherent to say that it does not create jobs. All income comes from spending, so government spending creates income - jobs.

Federal spending is the introduction of new financial assets (money) into the economy. Taxation is the way that the government destroys excess dollars (or excess potential demand) to prevent too many dollars from existing, which could stimulate demand to the point that it could outstrip productivity and create excess inflation. Obviously, with our unemployment rate so high right now, our capacity for productivity is not even close to being fully utilized.

And this is the real irresponsibility going on right now. Despite the fact that demand-driven inflation is not even close to becoming a problem, we are not investing in our collective future by spending on science, technology, education and infrastructure. We are allowing our potential productivity, specifically in the form of workers and their skills, to atrophy.

Saying that our current deficit spending is generational theft makes little sense. Our children cannot send resources back in time to us anymore more than the baby boomers can send resources back in time to cover the much larger deficit spending of World War II. We must really think about what it actually means to “pay back” the debt of the federal government. I will use China, one of our “creditors” as an example.

Paying back China, paying back our debt, simply means exchanging China’s bonds for dollars (which are both forms of IOU’s). Then what happens? Nothing. Nothing until those dollars are spent. And what happens when those dollars are spent? It stimulates the economy. People buy our products and since spending equals income, it helps our employment rate to decrease.

People think that China (and other US “lendors”) have the better of us. But the opposite is true. China sends us real products, real resources, and yet they refuse to exchange the dollars they receive for products. So we are getting all the stuff. So “paying back” our debt means China buying our products instead of sitting on dollars or bonds. And they are free to do this at anytime, but for some reason right now, they don’t want to spend their dollars, then want to hold them in the form of government bonds.

So “paying back” our debt is simply turning one set of IOU’s (bonds) into another (dollars), which makes little difference until the dollars turn into demand (when they are spent). And inflation, the real risk, only becomes a problem when our prodcutivity cannot keep up with demand, hardly a problem now. If it did happen, there are many courses of action to deal with it.

You are right that the stimulus was not effective enough, but that is because it was far too small to deal with the downturn. Trillions upon trillions of dollars in potential demand evaporated with the housing and stock market collapses. The stimulus was hardly enough to offset that. We can’t say that ibuprofen doesn’t cure a headache when we only take half of one.

Your claim that public spending requires taking money out of the private sector is false. Once again, public spending puts new financial assets into the private sector. When the federal government spends, it does so by creating money out of nothing. When it taxes, it destroys money. This is operationally how it works, even if we SAY that the federal government taxes in order to spend. Where did the money being taxed originate if not with government spending?

So If the government spends more than it taxes, it creates money into the economy. Say it spends $20 more than it taxes. Then it sells a $20 bond to correspond to this debt (which it operationally does not have to do, but does so because of old laws corresponding to the age of the gold standard). The government has spent $20 into the economy, taken $20 out of the economy through a bond it’s equal right? No! Because a bond has been created - a new financial asset, which is very liquid. It pays interest and it can be borrowed against or sold. And people buying bonds are looking to save anyway, so it transfers their money from relative inactivity into the active hands of the recipient of the government spending. For instance, the government stimulates the economy by hiring military personnel with deficit spending and then sells a bond which simply puts money into a bond for a person who was looking to save it rather than spend it anyway. The new bond is created, and inactive money is transferred into active money.

But I agree completely with your point that the entrepreneurial spirit of American must be engaged. And the only way this will happen is with enough demand (dollars actively being spent) to stimulate the creativity of industrious American businesspeople. There is no money to be made if there is no money!

Thanks again for your time. I appreciate the genuineness with which you approach your job.


Steven Stark