On the Economy

I’m glad the economy is a top issue because it provides an opportunity for people to learn more about it. I suggest the resources on economics provided by the Campaign for Liberty.

Was the bailout a good idea?

No. The bailout selected “$700 billion” because it’s a “really big number.” It failed the first time, and then they made it worse and increased it to $850 billion. The true cost of the bailout is likely to be closer to $1.5 trillion. The bailout certainly made the economic crisis much, much worse. (This is the main reason I considered voting for Ralph Nader, as he strongly opposed the bailout.)

See “The Bailout Reader“, and maybe a little more specifically, “The Rescue Package Will Delay Recovery“.

But even without going into the details, common sense should tell us that it is not possible to spend your way out of an economic crisis. Excess spending is what worsened the crisis to begin with. What makes you think more spending would help?

And most importantly: How will we pay for this?

See: “Spending the Economy into Oblivion“.

Even if we could pay for it (which we can’t), is this something the federal government should do?

Have you heard of a document called the U.S. Constitution?

The federal government is not supposed to manage the economy. Believe it or not, nobody (and especially not anyone in Washington D.C.) is smart enough to run the economy.

Ben Bernanke and Henry Paulson are trying (and failing).

Henry Paulson’s plan does not work, not in theory and most certainly not in practice.

Our Founding Fathers “created a society based on the radical idea that the purpose of government was to protect the rights of the individual, preexisting rights granted by God rather than the state. For the first time in human history, a government was designed to serve the individual, rather than vice versa.”

In other words, they said “the role of government should be one thing: to protect liberty.”

I used to think that “a little inflation is healthy and good.” I used to think that debt was not a bad thing, that it enabled people to accomplish good things that would otherwise have been impossible. While it is true that not all debt is bad, this has been taken to an extreme in recent years.

The Federal Reserve, a central bank, prints money with nothing to back it up (also known as “out of thin air”). The government spends it, which inflates the money supply and is effectively a tax. It’s a tax on savings and a tax on the money we’re earning. And the worst part of it is that it hurts the poor and the middle class more than anyone else.

The Fed is at fault for the Great Depression.

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve,” Ben Bernanke said. “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we (the Federal Reserve) did it. We’re very sorry. But thanks to you, we won’t do it again.”

And they are a primary cause of the current economic crisis.

Educate yourself. Ask questions in the comments.