I see from time to time talks of governments needing to spend money on various projects to help the ailing economy. The tragic part of this belief is that it allows governments to continue to practice the same policies that got us in this mess. What got us in this mess are things like central economic planning, fiat currency, fractional reserve banking, central banking, legal tender laws, over taxing and overgrown government. It is hard to imagine governments giving up some of its power for the good of its people, who ultimately are their masters. The problem is caused by governments and central banking, so there for the solution is not for them to solve. In fact all seven things I mention above that got us in this mess can be solved by governments doing less not more.

The reason why no stimulus package will ever work is the fact every time governments collect revenue and spend it, it is more wasteful and less effective than people spending it or saving it for themselves. Imagine every time you got paid your money was given to a person to spend it for you. If this person charge you for every expense plus took a ten percent fee for every product they bought for you; would this arrangement be more beneficial to you than you buying the things for yourself?

This is roughly what governments do. Governments have to pay the people who collect the taxes, the people who spend the taxes, the people who supervise them, the people who decide how the taxes should be spent and more. Even if you have a government that was less wasteful and had no corruption, it still would not be as efficient as people spending their money for themselves. Another problem is even if governments reduces its size and collect fewer taxes, it still will use fiat currency and central banking. The system of central banking, fractional reserve banking and fiat currency is unsustainable and doom to collapse. Instead of stimulus packages what governments need to do is get out of the way and allow people to opt out of these failing systems.