Dick and Jane are married and have three children. Dick has a job that pays him $50,000 per year. Jane takes care of their home and children. She has no income. They both agree that their lifestyle is somewhat depressed and would like to somehow give it a boost.

They mull over their options. Jane could get a job, but with child care expenses and the additional income tax they find that the additional net income would be very small, and not worth giving up her time at home with the kids. Dick could work longer hours or get another job, but he would then have very little time to spend with his family.

Then they have an epiphany. Why not just create a job within their household? Why not hire Jane to keep house and care for the kids and pay her $25,000 per year? This will raise their total income to $75,000 per year. But where will they get the money to pay her? Well, the options are to borrow the money or tax Dick’s income or some combination of both. They decide on the latter.

When their friends and relatives hear about the plan a few think it’s a wonderful idea but most have serious reservations. Some of the skeptics ask how taxing Dick to pay Jane is going to increase their combined real income. Others complain that borrowing the money will probably lead to bankruptcy or leave their kids with the debt down the road.

But Dick and Jane are undaunted. They’re too excited now about the hope and change coming to their lives.

Let me see if I can lend a little perspective to the magnitude of our national debt — which is reported to be about 10.7 trillion dollars. The population of the United States is estimated to be about 304 million. If I divide 10.7 trillion dollars by 304 million people I get about $35,200 per person. So each man, woman and child in the US would have to cough up over $35,000 to retire our national debt. A family of five would have to fork over more than $175,000. Are you ready to do your part when called on?

My wife and I are holding about $14,000 worth of Treasury Notes, but even after forgiving those we would still owe $56,000.

But what if we could tap everyone in the world to help us out? The world population is estimated to be about 6.7 billion. After doing the arithmetic I get $1,600 per person. Our national debt comes to $1,600 for each man, woman and child on this planet. Mind boggling.

If I assume an average annual percentage rate of 5 percent the interest alone on the debt is about $17,000 per second. That’s right, I said per second. We pay about a million dollars per minute. While you were reading this post we paid about a half million dollars in interest.

I haven’t confirmed this but I’ve read that it takes all the income taxes collected from West of the Mississippi River to pay the interest on the debt.

Despite this almost incomprehensible debt President Obama and the Congress want to pile on another trillion or two.

Paul Krugman, a Princeton professor and New York Times columnist, recently won a Nobel Prize for his work in economics. You might think he’s a pretty smart dude when it comes to economic stimuli and other money matters, but his recent column doesn’t support that in my humble opinion. He attempts to convince his readers that in jump-starting the economy it’s much better for the government to spend money directly than to put money in the hands of the people, through tax breaks, and let them spend it. I don’t buy his arguments. Here’s one of the three points he makes:

Write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

I’ll give Krugman the benefit of the doubt and assume that he believes government is the best judge of how to spend the people’s money only part of the time.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

Do you suppose Krugman doesn’t know the difference between income taxes and user fees? Most people don’t complain as much about user fees as they do about income taxes. They know that if we are to have a national highway system it has to be paid for somehow and a tax on fuel is a reasonably fair way to do that. The same is true of the air traffic control system. If you don’t fly you don’t pay the fee. Those who do fly pay for the ATC system. If you drive less than others you don’t pay as much for the highway system as the others.

Further, Krugman wrongly assumes that a government-run ATC system is the only alternative. He assumes that the only alternative is midair collisions. Not so. One alternative is for the airlines to cooperatively operate their own ATC system. But no matter how it’s done there is a cost and the air travelers will have to pay it.

The people are more likely to object to their income taxes being used to provide a 50 million dollar stimulus of the National Endowment for the Arts.

The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created — because a large fraction of any tax cut will simply be saved.

Krugman keeps slipping in the “always” modifier. Perhaps nobody does really believe that a dollar of tax cuts is always better than a dollar of public spending. But a lot of people believe that it usually is.

Krugman casually dismisses the value of money saved. He apparently believes that the money must be spent in order to help the economy. But I thought we were in a credit crunch. It seems to me that, provided the savers aren’t stuffing the money in their mattresses or burying it in their backyards, the saved money will become available to borrowers who will then spend it on things they need. That is, those that don’t need to purchase something are making purchases possible for those that do.

This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.

Me thinks Krugman’s arguments are a bit nonsensical. They are clearly not Nobel-winning-professor caliber.

President Bush just announced that the government will lend GM and Chrysler over $17 billion to help them stave off bankruptcy. A better plan would be to allow each taxpayer to decide how much he or she believes the car makers need to be saved by sending them money directly. Oh, that’s right. We already have such a plan in place. It’s called buying stock. And apparently there aren’t many people who believe the car makers are a good investment.

So Bush rides to the rescue of companies that the people have already decided aren’t worth saving. Or, more accurately, he rides to the rescue of unions that the people have already decided aren’t worth saving. We have several car companies that are operating at a profit without the help of the UAW. But we have only one UAW and the government is afraid that it will collapse without a bailout.

Propping up failing companies will work in the long-term about as well as the practice of promoting students to the next higher grade despite their inability to perform at that level. Come to think of it, perhaps the government and industry are now being run by people who received social promotions in grade school. Perhaps they are contributing to our current economic woes.

One thing is certain. Our economy will collapse completely if we establish the policy that no aspect of the economy is allowed to fail. Preserving the inefficient, the unneeded and the unwanted, will harm the efficient, the needed and the wanted. Can you imagine where we would be today if we had refused to let the horse-drawn industries disappear? What about typewriters? Would you buy one if retailers still stocked a wide selection? How about at a government-subsidized low price?

Open-source software (OSS) is a good example of what a free market can produce, even when the profit motive is not directly driving it. There are plenty of profit driven examples. Take shoes for one. There are reasonably priced shoes available for practically any use or taste. Can you imagine a government bureaucracy running all shoe design and production? How would it decide what the people need or want? Actually it would probably place very little emphasis on what the people want. There is no way it would produce hundreds of shoe styles.

Open-source roughly means that the software application is available at no direct cost and that the user has access to and the right to modify the source code in order to customize the behavior of the software. Widely used examples of OSS are the Linux operating system for personal computers, the OpenOffice productivity suite, the Firefox browser and the WordPress blogging platform. All of these were produced by people from around the world freely choosing to contribute their time, knowledge and skills to the effort. Generally they do it without pay but some do eventually profit indirectly from their association with the development project.

Some argue that the development of OSS is a socialistic enterprise, but I think it is more of a charitable effort. No government mandates what is developed or how it is developed.

OSS developers are subject to the same market forces as commercial software developers. Its success is determined by the consumers of software products. If they like it they will use it; if they don’t they won’t. If they prefer a commercial product to OSS they will use the commercial product. This is demonstrated by the fact that the number of users of the Microsoft Windows operating system far outstrip the number of users of the free open-source Linux operating system. Nevertheless Linux is a very successful product. But there are plenty of OSS products that never catch on.

I have direct experience with a government bureaucrat trying to manage the development of software. I used to develop and use software in my job with the US Department of Defense. Many years ago each branch of the military developed and used its own software for a particular common purpose, but coordinated closely with the other services. A manager decided that this apparent duplication was inefficient and that we should standardize the software across all military branches. He was right that the practice involved additional cost but he refused to give any weight to the benefits of competition between the services that was inherent in the existing practice or to the fact that the services’ requirements were not identical. We argued that too much standardization can stifle innovation and damage suitability. He wanted to sacrifice effectiveness in order to save some money and exercise more stringent control. We were unable to convince him he was wrong, but were able to ignore his demands until he moved on to another job.

A free market will always produce more and better choices for the consumer, whether those choices come from commercial or charitable enterprises.

I heard a man (didn’t catch his name) on television yesterday say that President-Elect Barack Obama is going to create thousands of jobs for people to “weatherize” houses. He didn’t say how Obama would perform the magic of creating demand for house weatherizing that apparently does not exist now. Private businesses would be providing those services if the demand existed.

A real job is an activity that adds to the national wealth. That is, it produces something of real value, something people want and are willing to pay for out of their own pockets. A job “created” by the government obviously does not add that kind of value; it is just another form of public welfare. Apparently, what Obama has in mind is hiring hordes of people to knock on our doors and tell us that they can weatherize our houses for some heavily subsidized price, or perhaps for free.

He apparently believes that the only reason people aren’t weatherizing their houses on their own is that they can’t afford it. This is not necessarily true. For the most part, weatherizing a house means sealing air leaks to make it less expensive to heat or cool. There is a downside to living in an airtight house; it can cause health problems and possibly suffocation. Why make your house airtight and then have to open a window to get fresh air to breathe?

Consider your car. It is designed to transport four or more people in a relatively confined space. It is relatively airtight for reasons other than heating and cooling. So you often have to slightly open a window or two to get needed fresh air, or you use the provided settings on your car’s HVAC system to allow fresh air to pass through your car.

Houses aren’t as confined as cars but you probably spend more time in your house than in your car. My house isn’t even close to being airtight — I can see light shining through the cracks around my doors — but it starts to feel stuffy after a few hours inside.

Guidelines for Obama and his minions: Breathing fresh air good; stuffy house bad. Free market good; central planning bad.

I just heard Senator Debbie Stabenow from Michigan say on Morning Joe that nine out of ten workers in the USA are employed by the auto industry. If that’s true she has identified the problem with our economy. If 90 percent of our workers are building cars and six percent are unemployed how can we expect to produce all the other goods that we need with the remaining four percent — like houses. But wait a minute! I thought the collapse of the housing market was caused by overbuilding.

One of the most dominant complaints lately has been that our economy has shifted too far from manufacturing toward service. I suppose we can stop worrying now that Senator Stabenow has spoken.

Obviously, though, the senator is wrong. What she probably meant to say is that nine of ten workers contribute, to some extent, to the auto industry. But I don’t believe that either.

The biggest problem we have in this country is that too many demagogues like Stabenow are in leadership roles.

From Roger Cohen’s column in The New York Times about the government’s attempts to fix the financial meltdown:

But as the state intervenes, in what Ed Yardeni, an investment analyst, called “a giant global game of Whac-A-Mole,” the moles keep popping out of new black holes in our financial system.

“We’ve tried rubber mallets, now we’re using bazookas, but we’re flying blind,” Yardeni told me.

Another testimonial to the fact that the economy is too complex for the government to manage. Each step the government takes precipitates dozens of additional steps it must take, but it doesn’t know the direction in which it should move. Lack of information leaves trial-and-error as the only mode of operation open to the government.

Economists have known and have been saying this for over a century, but neither of the two candidates for President get it. I just heard McCain talking about how his government will fix the economy and get it back on track. Obama counters each McCain fix with about three of his own. McCain wants to fix what he sees is wrong with the economy while Obama wants to take charge of its day-to-day operation. Neither will succeed. In fact, both will aggravate the problems.

My opinion is that Obama will do more damage than McCain. Isn’t it pathetic that in choosing a President we have to resort to picking the one that will inflict the least amount of damage on the country?

The whole “Joe the Plumber” case epitomizes the looney left (which includes the Obama campaign). They attack any person or institution that sheds some much needed light on Obama’s real agenda. A plumber in Ohio, who said his name is Joe, asked Obama essentially this: If I become a small-businessman making over $250,000 a year, are you going to take more of my income and give it to other people? Part of Obama’s response was that spreading the wealth around is good for everybody. McCain, of course, jumped on Obama’s socialist comment big-time and it got a lot of play in the media.

The looney left’s response? Joe is not a plumber (because he doesn’t have a license). Joe only makes $40,000 per year so he would actually be helped by Obama (never mind all those who do make over $250,000). Joe is behind on paying his state taxes (he owes about $1200). Joe was a plant by the McCain campaign (not substantiated; if so, so what?). Joe is only his middle name (I’m not kidding; someone felt this needed to be pointed out).

They seem to be saying that Joe is unqualified to ask such a question so Obama’s unguarded response should not count. Apparently it’s okay for debate moderators to ask hypothetical questions, but not the average Joe.

Joe the Plumber is not running for president. Barack Obama is. So the spotlight should be on Obama, not on Joe the Plumber. In the context in which it was made Obama’s comment that spreading the wealth around is good for everybody clearly reveals his socialist bent. While spreading the wealth around is a desirable result of capitalism, it is not guaranteed on an individual basis; it is linked to the extent of an individual’s contribution. Capitalism provides equality of opportunity; socialism provides equality of outcome (everyone ends up poor).

Obama wants to take money from the wealthy and give it to the poor. If that sounds admirable to you, you’re a socialist.

Barack Obama claims that the government screwed up our financial system, yet he wants to put the government in charge of our health-care system. He might argue (wrongly) that it was the Republicans who screwed up the financial system and that he and the Democrats will run the health-care system properly. But does he believe the Democrats will stay in charge forever? What will happen to his health-care system when those bad ol’ Republicans take over again? And they will after 4-8 years of an Obamanation.