Does money grow on trees? According to most parents the answer is a resounding no. A child may see no reason why a continuous stream of money is not available. A parent explains money must be earned before it can be spent. A child may create a “job” for himself, such as organizing colored rocks into piles and may see no reason why he shouldn’t get paid for his efforts. A parent explains only jobs with real value are worthy of pay.

Yet by adulthood he learns his childish beliefs are correct after all. A continuous stream of money is available, he is told, it just needs to be printed at the Treasury; spending is the road to prosperity, earning is so pass?; jobs can be created by decree, all that is needed is a cadre of bureaucrats.

Politicians from the president on down are now engaged in a massive spending spree based on a child’s view that spending money is the source of prosperity rather than a result of earning it.

Let’s examine the effects of such a policy.

The first thing to recognize is that every dollar spent by the government is taken from one person and given to someone else. This is true whether spending is enabled through taxation, running up a deficit or inflating the money supply. At best all the government can do is redistribute existing wealth; it cannot create it.

For example, printing money causes its value to decrease relative to goods and services — this is called inflation. Recipients of newly printed money have more dollars in their pockets, but the savings of financially responsible people are devalued in the process.

This is especially destructive because savings are the fuel of production. When money is deposited into a bank account it used to finance productive endeavors, which, in turn, earns the depositor a dividend. In this way the depositor is contributing to production and earning a profit simply by saving.

Printing money out of thin air devalues it, dilutes savings and destroys production while rewarding consumption. Monies saved for retirement or to start a business are effectively transferred into the hands of spenders.

The same applies to taxation and deficit spending. Both expropriate the earnings of productive individuals either now or in the future and give it to those who have not produced. Every dollar of government spending has to be taken from some productive person.

This is precisely what Obama’s “stimulus” plan does by design. Through a combination of deficit spending, taxation and printing money, wealth is taken from productive individuals and given to nonproductive ones. Every attempt to “stimulate” Paul comes at the expense of impoverishing Peter.

The same applies to jobs.

Every freeway construction job created with “stimulus” money is a job lost at a high-tech startup, a retail store or elsewhere in the economy. And to the extent that these “stimulus” projects are less valuable than the food, clothing, technology, health care, etc. that could have been produced, wealth has been destroyed.

In a free market, new projects and jobs do not come at the expense of others. When Apple hires an engineer or launches a new product, it is not at the expense of Microsoft or anyone else. No funds are expropriated, no resources are stolen, no taxes are levied and no money is devalued. A new job or product at Apple comes about by producing values, leaving Microsoft and others untouched.

While Apple’s efforts may adversely affect its competitors, it is only because Apple has created more value, not because it has taken something. Thus Apple’s success represents a net gain in value.

Unlike Apple, which must attract investors and employees by offering greater value, government simply takes the investor’s money, devalues the savings of businessmen and places debts on future taxpayers. In the process it destroys the ability of countless businessmen and investors to create and produce.

Government cannot produce goods and services, create jobs or run an economy for one simple reason: These values cannot be had by any means — their attainment requires specific means. Namely, they require thought.

Wealth is a product of thinking. It requires innovation, ingenuity, investing acumen and long-term planning. It requires using one’s mind. This is what a free market allows and what government control of the economy destroys.

A job created in a free market represents ability, value creation and trade. A job created by government edict represents political power, redistribution and force. The former enables thinking minds; the later makes thinking irrelevant.

One cannot achieve economic prosperity by destroying its basic requirement: a free mind. To the extent freedom goes, prosperity goes with it. If Obama cares about economic prosperity, it is freedom he needs to be stimulating.

Jim Allard ([email protected]) is a graduate student majoring in biological science.