Some wise and admonitory words from Ron Paul about the current mania for government spending/stimulus/bailout:
How did we get here? How do we get out? As usual, Washington has all the wrong answers. According to many politicians, we got here by not spending enough, not consuming enough, and not regulating enough. Now government, like some mythical white knight, is going to ride in to save the day by blanketing the economy with dollars, hiring an army of new bureaucrats, creating make-work jobs, and sending everyone some form of a bailout check. The debate seems to focus on whether this will cost enough to save the economy, or if this is just a “down payment” with much more government spending to come.
“Talk like that,” Paul notes, “would be comical, if the results weren’t going to be so tragic.”
Maybe there are negative, concave “bubbles” as well as the usual convex ones: sinkholes that attract and inspire unthinking enthusiasm just as the ballooning escalators do. Yesterday, we worked ourselves into an ecstatic frenzy of lending and borrowing. Today, coming out of our stupor and noticing the enormous hole we inhabit, we throw ourselves back into a Bacchanalian whirl of borrowing and lending, hoping to repurchase that delightful sense of oblivion that comes of blurring the distinction between debt and cash.
In fairness, the two can look a lot alike. In the flattering light of morning, they are at first glance indistinguishable. Withdraw $10,000 from your savings account and stack up the bills. Then open up a line of credit and do the same thing. Both stacks are “legal tender for all debts, public and private.” So start spending! It’s only late in the afternoon, when you’ve run through most of both stacks, that you notice the tiny slip of paper at the bottom of stack 2: “IOU,” it says, and, just in case you forgot, it has a due date stamped firmly on its face. What to do? The savings account where you got the first stack is empty. The teller who offered you that line of credit has gone out of business–too many people neglected to honor their IOUs.
Basically, we have two choices: 1) More whirling about, making the hole ever broader and deeper: “stimulus,” they chant, “bailout,” they cry. Or 2) we realize the decidedly un-ecstatic truth Ron Paul mentions: that “our economic problems are due to loose monetary policy, central economic planning, and the parasitic expenses of government. Unless we assess these problems honestly, we unfortunately have a long way to go until, like the junkie, we hit rock bottom.”
You forgot to mention, withdraw 10,000 and the IRS gets notified. So consume but then the government wants to know why you took out 10K
We are charging our quality of life to our kids and grandkids credit card. This is especially sad given that previous generations have worked, saved, and sacrificed so much to pass us a country that is the most prosperous in the world. What will this same country look like when we pass it to our kids? I’m just hoping when we hit rock bottom those responsible don’t spin it so that they are not to blame. Maybe then if we open our eyes we can start that long climb back to sound money and prosperity.
My question is this: Where’s the MSM? The formally critical-minded devil’s advocates? Does anyone find it odd that no one in the MSM is questioning the absurdity of the “fix” to the current situation. Are there not a few moderately intelligent journalists in the big networks, newspapers, or national magazines willing to wave a giant WTF flag in front of the American people? For that matter, are American so stupid that they can’t comprehend the subsequent hangover from all this bailout and stimulus spending?
Why not just lower taxes? Across the board?
Why does that never seem to enter the equation?
danno, the MSM has no idea what is going on. No one gets into journalism because electrical engineering or accounting was too easy. The MSM is capable of refereeing politicians who argue like plaintiffs on Judge Judy’s show, but not much else.
A fundamental problem we face is that people don’t understand:
1) How wealth created
2) What “Wealthy” people do with their money
3) How this is what increases our overall standard of living
And when I say “people” I am including the elected REPUBLICANS!
http://web.me.com/darrell_kim/Site/Wealth_Creation.html
Why don’t they just mail everyone on the tax rolls one million dollars? Or even half that?
We have literally tens of thousands of governments, 1 federal 50 state, 3000+ county, and many more thousands of local ones. All of them are potentially doing the same foolishness. One can be excused for despairing of fixing the federal situation. The scope simply overwhelms. But what about your municipality? What about your regional authority? What about your county? All of them need examination. All of them need oversight.
Insist on sanity where you’ll have an effect. Do it now and keep on doing it.
Remember the economic nannyists who said we as Americans didn’t save enough. Now we are and the ‘experts’ are not happy with the results. Remember the banks that weren’t lending last year so we needed to infuse them with money from the Fed. Well, we’re all saving now, so what are those banks doing with all that savings sitting around? If the banks sit on the saving we’re no longer spending, that money will accumulate so that when the public thinks we’ve bottomed out and its time to spend, all those dollars will be chasing those fewer items on the shelves. We’re talking real dollars, not the digital stuff the big boys shove across their wires. Instead of inflation confined to the digital numbers, there’s going to be real inflation down in the Walmart world. So to fight that, the Fed will jack up interest rates to where business chokes and no one can afford to buy a house. Is there something circular here?
I once wrote that the government trying to spend its way out of trouble is like an alcoholic trying to drink himself sober.
If history is any guide, this perpetual debasement of the currency will result in hyperinflation.
Oh, wait, “This time it’s different.”
Uh huh.
re those 200,000 or so new bureaucrats that mr obama plan to hire, you are getting off lightly. britain’s mr brown, who is a real existing socialist, has put 800,000 people on the public payroll since he got into power in 1997. given the relative size of the populations of the united states and britain, that would be getting on for the equivalent of five million new u.s. government jobs.
Roger, you’ve finally discovered Ron Paul; it’s about time ol’ boy.
Oh, and you were three years behind me on David Stove, too.