Failed Policies of the Last Twelve Years.
When I hear the president say, “We can’t go back to the failed policies of the previous administration”, it leaves me scratching my head. What were these policies, and how different are they from the policies of the present administration? Lets look at the policies during the Bush administration.
Medicare part D, an intervention into the health care system targeting prescription drugs. A stimulus program of 180 billion dollars which tax payers received in checks from the treasury. The TARP (Troubled Assets Relief Program) Bailout was the government purchasing bad assets from banks allowing their balance sheets to look , well, untroubled. The General Motors bailout, in the form of a bridge loan, which kept a business which was loosing money afloat by using our tax dollars as a life preserver. Last but certainly not least the Federal Reserve lowering interest rates to near zero, and printing (counterfeiting) money. These policies led to a 500 billion dollar budget deficit in the last year of the Bush administration which was, the largest one year deficit in the history of the country. All of this and much more led to an unemployment rate of 6% and rising.
Now compare these policies with the present administration. There was the 900 bill. dollar Stimulus program, some used to buy troubled assets and much going to businesses and industrys which were politically connected. General Motors was bailed out through a rigged bankruptcy which funneled money to the UAW union and their pension. Obama Care is the attempted take over of the whole health care system. The Federal Reserve lowered interest rates to zero and continued to print (counterfeit) money, much of it used to finance government debt. The budget deficit has averaged 1.25 trillion dollars a year over the last four years for a total of 5 trillion. The unemployment rate grew to over 9% and has settled into the “new” normal rate of around 8.2%. These “new” policies of the Obama administration only differ with the “old failed” policies of the previous administration in degree not in kind. If the policies of the Bush administration helped get us into this mess, how do the same policies multiplied by ten by the Obama administration get us out of the problem. These policies have put off the recovery , and will continue to stall any true recovery.
The policies over the last two administrations are examples of government intervening in the workings of the free market. Government intervention, especially the Federal Reserve counterfeiting, misallocates resources, labor, and capital into unproductive areas of the economy. You must first produce before you can consume, a basic economic principle, but these policies start us down the road of consumption without production which gradually lowers the standard of living of a country. These interventionist policies of government, whether attempted by Republicans or Democrats, or tried by Mother Theresa and Gandhi, or Stalin and Moa, won’t work as planned. The only way out of this mess, brought about by government intervention, is to get rid of these policies. This will allow the inescapable forces of the market to correct the misallocations and malinvestments brought about by all these “policies”.
It is our fault that all of this has taken place. Our ignorance of basic economic principles has allowed verbal sleight of hand artists to fool us into believing that they can create abundance out of scarcity. This is a feat equal to the loaves and fishes miracle that Jesus pulled off. We have been duped into believing that omnipotent Government can make anything happen by decree. Looking at their track record should be enough to make us skeptical about anything politicians claim they can accomplish through Government. But, like Charlie Brown, we hope Lucy won’t pull the football away, that this time she will deliver on her promise. Lucy always pulls the football away, just like politicians can’t deliver on their claims. Politicians don’t turn in their pitch fork and horns for a halo and wings when they get elected, and they certainly don’t acquire the power of granting wishes. They remain self-interested human beings like all of us and their number one interest is to get reelected. They buy votes with the currency of plausible sounding claims. Because of the first rule of economics, scarcity, it’s not possible for them to be successful, in any measurable degree, unless their goal is acquiring more power over us, in which case they are exceedingly successful. We have allowed Government the power to intrude into every aspect of our lives. It is no longer good enough to elect people and go back to our regular lives for the next two years. These people have to be monitored and then pressured to roll back Government and give up the power they have stolen from us. Sovereignty of the individual over the coercive powers of Government has to be reestablished. This has always been the fight, Government coercion or individual liberty. Society is always moving toward one or the other and I hope we can all agree that we have definitely moved way too far in the direction of Government coercion. Our constitution was set up to protect the individual from coercive intervention by Government. “Eternal vigilance is the price of freedom”. Eternal vigilance takes time and effort and we have made the decision that the cost of remaining free,“eternal vigilance”, has too high of a price compared to whatever else each of us has decided to do with our time. Individual freedom, not the Government, has created this standard of living we enjoy and take for granted. So it is in each persons interest to remain free.