Get Your Pork-filled Stimulus! III
I have received a response by Anonymous to my response to his/her comment. I will post it below will my response in bold brackets spliced in:
The fact is that we are now in an economy where credit is frozen, banks refuse to lend money, and there is no incentive for anyone to spend.
[Have you educated yourself on why the economy has gotten to this point? It's very important to understand the cause and effect of it all. The economy is in the mess it is in, not because of greedy capitalists, but because the foundation of our economy is fiat paper money care of our central bank, the Federal Reserve. Our money is not free-market, and our money is not guaranteed. This makes it completely unstable and prone to government manipulation. That is precisely the reason for our bust, and the preceding boom period. The Federal Reserve manipulated interest rates which sent a false signal to producers, thereby encouraging them to begin projects that could not be finished. This theory, the Austrian business cycle theory, accurately explains every single economic boom and bust since the country was founded, including the 1929 crash, the 1970s, the Dot-Com crash, and our current mess. I recommend exploring it further. You can do so through the links on my post here.]
There have been plenty of opportunity for the economic environment to change, but quite frankly this has not happened. No, the government cannot create wealth. However, it IS the government's responsibility to increase consumer confidence, which in cased you have missed it, is nil.
[And how is consumer/business confidence supposed to be increased when not only the government got us into this mess, it continues to negatively impact the market through takeovers, bail-outs, and pork-barrel stimulus packages? This "regime uncertainty" existed during the Great Depression for the same reasons.]
This fact, coupled with the fact that we are continually discovering that businesses have been grossly mismanaged and irresponsible in regulating themselves, means someone needs to act. The american businessman won't act. Unless they are coerced.
[I'm not sure that giving the keys to a government that has been irresponsible and mismanaged would produce any different results. Again, it goes back to regime uncertainty and moral hazard. The government has interferred with the market every step of the way. Those claiming our current failures are free-market better take another look at the causes of this mess. They are certainly not free-market. The Federal Reserve and our fiat money system are the complete opposite of free-market.]
Look at the Big Three. It was not until they got caught that they decided to restructure their business models. (I look forward to seeing what that brings today). If it was not for the government, the Big Three would have let the american people hang with nothing.
[The Big 3 are in trouble because the Big 3 are uncompetitive, and they have been for years. What's needed is for them to be restructed through the bankruptcy courts and their unused capital released to find better uses.]
In a previous post, you called Obama ignorant. No, this is not the case. President Barack Obama is tired of the status quo. As am I. I am tired of the same old arguments from fiscal conservatives that have produced NO results.
[And what arguments are those? Do you believe we've been living under fiscal conservatism for the last 8 years? Not so.]
Who knows? Maybe the stimulus plan will fall flat on its face.
[You can be confident that it will.]
But I would rather have a president for one term making every attempt to do what is right by the people, than have a president for two terms looking out only for his own agenda and allowing the same ridiculous economic policies to rule.
[And I would rather have a President who not only understands good economic policy, but also the Constitution and the limits it is supposed to set on the executive.]
Quite frankly, it is pathetic that it seems we in this country have learned nothing from our history, and that we are even in this situation in the first place.
[I agree. It's pathtic that we have't learned how damaging government interference in the market is. You'd think with the defeat of Socialist Russia we'd learn something about unintended consequences.]
At the very least, I am glad I can wake up every morning, closed storefronts and all, knowing the President is doing SOMETHING.
[Even Bush did something. Look where it got us. And Hoover/Roosevelt. Ten years of economic depression. Unfortunately, Obama hasn't learned the right lessons from that era.]
If it is really true that the window glazier would just go buy a new suit, then he must be waiting for an executive special ordered suit, or for prices to drop so low he can trade buffalo chips to get it. Cause he's not buying the suit now, and if the american people don't grow up so the government CAN get out of the mix, he won't buy it at all.
[He doesn't need to buy it. Saving it would just as much good to the economy. The problem isn't whether or not people are spending. Spending is what helped get us into this mess. The problem is that we've been living in economic fantasy. Obama's moves are only going to delay the much needed return to economic reality. And when that time comes, it will be all the more painful, so long as the government continues to try to prop-up businesses that need to fail by printing more and more paper money. The problem is the Federal Reserve and the un-regulated (by the market) policies it has enacted.]
[I really appreciate you taking the time to post a comment. I enjoy the exchange.]
Skyler,
Skyler,
The fact is that we are now in an economy where credit is frozen, banks refuse to lend money, and there is no incentive for anyone to spend.
[Have you educated yourself on why the economy has gotten to this point? It's very important to understand the cause and effect of it all. The economy is in the mess it is in, not because of greedy capitalists, but because the foundation of our economy is fiat paper money care of our central bank, the Federal Reserve. Our money is not free-market, and our money is not guaranteed. This makes it completely unstable and prone to government manipulation. That is precisely the reason for our bust, and the preceding boom period. The Federal Reserve manipulated interest rates which sent a false signal to producers, thereby encouraging them to begin projects that could not be finished. This theory, the Austrian business cycle theory, accurately explains every single economic boom and bust since the country was founded, including the 1929 crash, the 1970s, the Dot-Com crash, and our current mess. I recommend exploring it further. You can do so through the links on my post here.]
There have been plenty of opportunity for the economic environment to change, but quite frankly this has not happened. No, the government cannot create wealth. However, it IS the government's responsibility to increase consumer confidence, which in cased you have missed it, is nil.
[And how is consumer/business confidence supposed to be increased when not only the government got us into this mess, it continues to negatively impact the market through takeovers, bail-outs, and pork-barrel stimulus packages? This "regime uncertainty" existed during the Great Depression for the same reasons.]
This fact, coupled with the fact that we are continually discovering that businesses have been grossly mismanaged and irresponsible in regulating themselves, means someone needs to act. The american businessman won't act. Unless they are coerced.
[I'm not sure that giving the keys to a government that has been irresponsible and mismanaged would produce any different results. Again, it goes back to regime uncertainty and moral hazard. The government has interferred with the market every step of the way. Those claiming our current failures are free-market better take another look at the causes of this mess. They are certainly not free-market. The Federal Reserve and our fiat money system are the complete opposite of free-market.]
Look at the Big Three. It was not until they got caught that they decided to restructure their business models. (I look forward to seeing what that brings today). If it was not for the government, the Big Three would have let the american people hang with nothing.
[The Big 3 are in trouble because the Big 3 are uncompetitive, and they have been for years. What's needed is for them to be restructed through the bankruptcy courts and their unused capital released to find better uses.]
In a previous post, you called Obama ignorant. No, this is not the case. President Barack Obama is tired of the status quo. As am I. I am tired of the same old arguments from fiscal conservatives that have produced NO results.
[And what arguments are those? Do you believe we've been living under fiscal conservatism for the last 8 years? Not so.]
Who knows? Maybe the stimulus plan will fall flat on its face.
[You can be confident that it will.]
But I would rather have a president for one term making every attempt to do what is right by the people, than have a president for two terms looking out only for his own agenda and allowing the same ridiculous economic policies to rule.
[And I would rather have a President who not only understands good economic policy, but also the Constitution and the limits it is supposed to set on the executive.]
Quite frankly, it is pathetic that it seems we in this country have learned nothing from our history, and that we are even in this situation in the first place.
[I agree. It's pathtic that we have't learned how damaging government interference in the market is. You'd think with the defeat of Socialist Russia we'd learn something about unintended consequences.]
At the very least, I am glad I can wake up every morning, closed storefronts and all, knowing the President is doing SOMETHING.
[Even Bush did something. Look where it got us. And Hoover/Roosevelt. Ten years of economic depression. Unfortunately, Obama hasn't learned the right lessons from that era.]
If it is really true that the window glazier would just go buy a new suit, then he must be waiting for an executive special ordered suit, or for prices to drop so low he can trade buffalo chips to get it. Cause he's not buying the suit now, and if the american people don't grow up so the government CAN get out of the mix, he won't buy it at all.
[He doesn't need to buy it. Saving it would just as much good to the economy. The problem isn't whether or not people are spending. Spending is what helped get us into this mess. The problem is that we've been living in economic fantasy. Obama's moves are only going to delay the much needed return to economic reality. And when that time comes, it will be all the more painful, so long as the government continues to try to prop-up businesses that need to fail by printing more and more paper money. The problem is the Federal Reserve and the un-regulated (by the market) policies it has enacted.]
Comments
I enjoy these exchanges as well. My only problem is, no matter what I or anyone else who disagrees with you says, we are always going to be wrong. I just have this feeling that if the economic stimulus plan was being presented by a conservative (though you will argue that would never happen), you would be praising the plan to high heaven.
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