Stimulus keeps prices artificially high at cost of consumers

The New York Times, yes that New York Times, recently has a piece about how the retailers are doing the governments job of bailing out the citizens. Huffington Post's headline was private sector goes public, with a link to this article. (You need a free subscription to see the whole thing.) The Huffpo subtitle is: Government stimulus not enough, so retailers create their own. I say this is great and shows how the government interference in the market right after the stock/housing crash was terrible for consumers. Once the government has stopped (albeit temporarily) artificially increasing people's paychecks the stores started to decrease their costs.

A lot of the government programs have come to an end,” said David Bassuk, a managing director in the global retail practice at AlixPartners, a financial consultancy. “So retailers are taking it upon themselves to do everything they can to get the consumer to spend, even opening up their own wallets to give money back to the consumer.”

If a retailer does not believe there is enough demand for his product, either because the product is inferior, the consumer lost his job or any myriad of other reasons, they have the option to lower their prices to increase demand. The government has been so busy trying to redistribute wealth so we all somehow magically get richer they have made it unnecessary for companies to correct their prices during times of economic downturn. Now that they have stopped a small fraction of the programs, the stores are altering their prices downward where the demand is due to unemployment rate and general uneasiness about the economy.

The government's boosting of peoples income, largely through borrowing from China that our grandkids will have to repay, have kept prices artificially high. This means that citizens have spent a larger percentage of their money in buying goods that were overpriced because of the government policy. This means that the government has redistributed money from the consumers (the citizens like me and you) to the producers (stores like Walmart, Target, etc.). This has happened even in a government that claims to be looking our for the "little guy". Give me a break. The government has been and always will be looking out for the big guy, which is why we need less government.

Happy Fourth.