Wednesday, February 11, 2009

The Government Is The Problem

Yesterday I wrote how it was the decisions of FDR that prolonged the Great Depression. Before his idea of "stimulus" we suffered through two severe, but short, recessions. These two periods were survived without the government interfering.

Now, we see the passing of the biggest government spending bill in history. Today, the Congress shaved $100 billion off (like we are impressed) to have a spectacular $700+ billion bill. This is totally ridiculous.

We are in a economic situation that was caused by the government. Every aspect of this "crisis" sees the government's hand in it. The bank lending crisis was started by Congress mandating that banks loan to unqualified lower income people. This started the entire subprime bubble which burst a couple of years ago.

Freddie and Fannie are quasi-government entities. Over the past few years, banks were pressured into "investing" in these organizations which caused them to be left with huge losses on their books. At the same time, the Fed, Treasury, and SEC operated with no oversight. Basically, they were asleep at the wheel.

Now, we are to believe these same people can get us out of this. Barney Frank is still in Congress. The same is true for Christopher Dodd in the Senate. Barack Obama was a Senator while all this went down. So was John McCain. Nancy Pelosi and Harry Reid still occupy the same offices they did over the past few years. As you can see, most of the players are still the same.

The government is solving this existing "crisis" by creating another one. There is a thing called inflation which is created when the government incurs massive deficits. Another interesting twist is that the larger the deficits, the worse the inflation. Jimmy Carter experienced this during his administration. Presently, we are seeing $1 trillion worth of deficits authorized by Congress. That means we are going to feel the effects of hyperinflation over the next few years. Prices will rise so quickly when the economy turns that it will make people's head spin.

Who will the government (and the media) blame then? I am sure they will find someone. The truth is they will never own up to the fact that they created the entire situation. Government is not the solution, it is the problem. Unfortunately, we have a President who believes that government is the answer. To me, this says that we will have big problems in the future.

Welcome to anarchy 2009.

Share and Enjoy!
Digg Stumble This Mixx Furl Propeller Simpy Live Twitthis Add To Slashdot Spurl Google Yahoo Reddit Technorati Blinklist Blogmarks Smarkings Ma.gnolia SphereIt Sphinn Feedmelinks

No comments: