Liberals often remind me of myself... when I was 10. They're often considered intellectuals, and sited as earning more college and professional degrees than conservatives. Liberals enjoy bashing conservatives as dumbass rednecks who can't possibly think on the same levels as the brilliant liberals... Though, if you take a quick peak into both sides' fundamentals.. you'll find that the opposite is true: The liberal mind is a naive mind that lives in a fantasy of theory.
When I was young, I remember my parents discussing a family who had lost all their possessions in a fire. I found it understandable to be upset at losing everything and having to start anew, but I thought they would be compensated for what had happened. After all, it's not like it was their fault. I was surprised, then, to learn that the family would not receive compensation as they had not purchased insurance on their home. I didn't understand.. But, it isn't fair.. The fire was deemed accidental, why shouldn't they be compensated for all their losses? My father simply laughed at me and said, "Son, life isn't fair. You're too naive now to understand that." Well, I certainly didn't like being called naive.. But most of all, I was upset and disappointed in America. Why, I thought. Why, in the greatest country in the entire world is there still misery and unfairness? We've grown in society, and people should no longer have to suffer. Right?
I felt the same when our neighbors were robbed later that same year. The thieves were never caught, and the stolen items never recovered. And again, I was astonished to learn that the victims were not compensated for these losses. Surely, the police or someone should pay them for the stuff they lost? It's unjust! Why should people have to suffer because of the actions of another? I was completely baffled at the idea of insurance, and the need to continually pay a premium just to be compensated when your possessions were lost at no fault to you. It just isn't fair. America is so much better than that, we need more government to help these unfortunate individuals.. And all those who are poor and needy.
Sound familiar? Well, it should. This is essentially the cornerstone of every liberal argument-- Need. But, people ought to be treated better. People need health care and social security. No, Americans deserve a better lifestyle. Why do we lack so much that all the other countries are providing for their citizens? Why is America so broken?
As I said, I once felt the same when I was ten years old. Then, I grew up.
I now understand that money doesn't grow on trees. You can't compensate people for the possessions they've lost, because where would you get the money to do that? On the one hand, there are charities and organizations that morally try to help the needy. On the other hand, you have the liberal's demand to tax, and take the fruits of one man's labor at the point of a gun. Which is the moral course of action? Taking wealth from the people that some entity designates as not needing it, and giving it to people that the same entity designates as in need? Or simply allowing people and the free market to offer up its own solution? From the latter comes charities, insurance, and incentivized prevention.
What I thought made America weak and foolish actually makes her strong and wise. It's up to you to make and lose wealth however you see fit; You're on your own. You are free to invent, to innovate, to be an entrepreneur. You are free to choose your own line of work; to choose a life of crime if you wish or to choose to be your own boss. I failed to understand that this freedom was what I was seeking to destroy in my utopia. You see, liberals don't want you to be able to choose. They want to take away the bad consequences of your actions, and thus, destroy that action altogether. Liberals want to institutionalize the concept of parental figures, onlookers to ensure you don't make the wrong choices in your life. Liberals don't believe you or I are intelligent enough to make our own decisions, they do not believe people should be given the freedom, the power to make their own decisions. What if you make a mistake? What happens if you should fail? Liberals seek to eliminate failure.. but they don't understand, nay, they are too naive to understand that this subsequently eliminates success. They would rather everyone be equal and have no success, than have to deal with both success and failure.
Herein lies the philosophical difference between liberals and conservatives: Should you be given the power to fail? Those naive individuals like my 10-year-old self would have you believe that government intervention is necessary to protect you from yourself.. You must be protected from failure, from chance, and from life itself. On the other hand, those who actually understand that what the liberals propose is not plausible, that to live in a world without failure is to live in an impractical world devoid of purpose and success, actually understand that failure is ultimately essential and inevitable of human nature.
I reject liberalism because I can think, because I understand the practical world, and because I refuse to embrace the idea that I need an all-powerful human-entity to tell me how I should live my life. I required parents in my first years of life to teach me how to live successfully, but I do not require parents in my latter years of life to tell me how I go about living that life.
I would like to confront typical liberal attacks on Capitalism, and the basic theories of limited government. I have disapproved of the Health Care bill from day one, and adamantly opposed Cap&Trade legislation as well as anything attempting to expand the scope of the federal government. When debating Liberals on these issues, there is a typical criticism that I ALWAYS hear. People say, "But, think about the poor. Think about those who have many children, are working multiple jobs, and can't afford health care." Or, "You're just selfish, why don't you think about other people?" The socialist left is constantly bashing capitalism and the practices of the free market economic system on the premise that it is "selfish". I shall address these concerns in this blog post.
First off, this entire dilemma can easily be solved by reading Ayn Rand's Atlas Shrugged. I've previously mentioned this novel.. it is one of my favorites :) The novel addresses the concerns of the progressive left who gain popularity and control through use of the media, and the idea that "selfishness" is the biggest threat to society. Hence, capitalism is frowned upon as its end result is the selfish desire for profit.
Perhaps one of my favorite examples of socialism in this book is the story of the "Twentieth Century Motor Company". This company was one of the most successful companies in the United States at the time of the original owner's death. The heirs to this business decided that they would not follow their father's greedy desire for profit. Instead, they would transform the company into a "modernized politically-correct" company; One that would not exploit others for profit. After the heirs preached to the workers about the plan, the company had a vote on it. (This next excerpt is from Atlas Shrugged, pages 661-663)
And if anybody had doubts, he felt guilty and kept his mouth shut-- because they made it sound like anyone who'd oppose the plan was a child-killer at heart and less than a human being. They told us that this plan would achieve a noble ideal. Well, how would we know otherwise? Hadn't we heard it all our lives-- from our parents and our school teachers and our ministers, and in every newspaper we ever read an every movie and every public speech? Hadn't we always been told that this was righteous and just?
Do you know how it worked, the plan, and what it did to people? Try pouring water into a tank where there's a pipe at the bottom draining it faster than you can pour it, and each bucket you bring breaks that pipe an inch wider, and the harder you work the more is demanded of you, and you stand slinging buckets forty hours a week, then forty-eight, then fifty-six-- for your neighbor's supper-- for his wife's operation-- for his child's measles-- for his mother's wheel chair-- for his uncle's shirt-- for his nephew's schooling-- and for the baby next door-- for the baby to be born-- for anyone anywhere around you-- it's theirs to receive, from diapers to dentures-- and yours to work, from sunup to sundown, month after month, year after year, with nothing to show for it but your sweat, with nothing in sight for you but their pleasure, for the whole of your life, without rest, without hope, without end... From each according to his ability, to each according to his need...
We're all one big family, they told us, we're all in this together. But you don't all stand working an acetylene torch ten hours a day-- together, and you don't all get bellyache-- together. What's whose ability and which of whose needs comes first? When it's all one pot, you can't let any man decide what his own needs are, can you? If you did, he might claim that he needs a yacht-- and if his feelings are all you have to go by, he might prove it, too. Why not? If it's not right for me to own a car until I've worked myself into a hospital ward, earning a car for every loafer and every naked savage on earth-- why can't he demand a yacht from me, too, if I still have the ability not to have collapsed? No? He can't? [...] Well, anyway, it was decided that nobody had the right to judge his own need or ability. We voted on it. [...] Do you care to think what would happen at such a meeting? It took us just one meeting to discover that we had become beggars-- rotten, whining, sniveling beggars, all of us, because no man could claim his pay as his rightful earning, he had no right and no earnings, his work didn't belong to him, it belonged to 'the family', and they owed him nothing in return, and the only claim he had on them was his 'need'-- so he had to beg in public for relief from his needs, like any lousy moocher, listing all his troubles and miseries, down to his patched drawers and his wife's head colds, hoping that 'the family' would throw him the alms. [...] so it turned into a contest among six thousand panhandlers, each claiming that his need was worse than his brother's. How else could it be done? Do you care to guess what happened, what sort of men kept quiet, feeling shame, and what sort got away with the jackpot?
But that wasn't all. There was something else that we discovered at the same meeting. The factory's production had fallen by forty percent, in that first half-year, so it was decided that somebody hadn't delivered 'according to his ability.' Who? How would you tell it? 'The family' voted on that, too. They voted which men were the best, and these men were sentenced to work overtime each night for the next six months. Overtime without pay-- because you weren't paid by time and you weren't paid by work, only by need.
Do I have to tell you what happened after that-- and into what sort of creatures we all started turning, we who had once been human?We began to hide whatever ability we had, to slow down and watch like hawks that we never worked any faster or better than the next fellow. What else could we do, when we knew that if we did our best for 'the family', it's not thanks or rewards that we'd get, but punishment? We knew that for every stinker who'd ruin a batch of motors and cost the company money-- either through his sloppiness, because he didn't have to care, or through plain incompetence-- it's we who'd have to pay with out nights and our Sundays. So we did our best to be no good.
There was one young boy who started out, full of fire for the noble ideal, a bright kid without any schooling, but with a wonderful head on his shoulders. The first year, he figured out a work process that saved us thousands of man-hours. He gave it to 'the family', didn't ask anything for it, either, couldn't ask, but that was all right with him. It was for the ideal, he said. But when he found himself voted as one of our ablest and sentenced to night work, because we hadn't gotten enough from him, he shut his mouth and his brain. You can bet he didn't come up with any ideas, the second year.
What was it they'd always told us about the vicious competition of the profit system, where men had to compete for who'd do a better job than his fellows? Vicious, wasn't it? Well, they should have seen what it was like when we all had to compete with one another for who'd do the worst job possible. There's no surer way to destroy a man than to force him into a spot where he has to aim at not doing his best, where he has to struggle to do a bad job, day after day. That will finish him quicker than drink or idleness or pulling stick-ups for a living. But there was nothing else for us to do except fake unfitness. The one accusation we feared was to be suspected for ability.
And that my friends, is why socialism fails. All people are given the same pittance whether they work or not. Intelligence and innovation is punished, and the strive to work is ultimately diminished. This is why I support limited government, and believe that free market capitalism is the pathway to prosperity. Why should government think they can do a more efficient job with the health care industry than the free markets can? Why does an entity who can't even run a profitable mail service think they can take on health care? I already know what atrocities lie ahead: Inefficiency and poor service will plague our system. I refuse to live in such a world as the man from "Atlas Shrugged", and his Twentieth Century Motor Company.
Capitalism: The drive for profit
"Let me give you a tip on a clue to men's characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it. Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter. So long as men live together on earth and need means to deal with one another - their only substitute, if they abandon money, is the muzzle of a gun." --Atlas Shrugged
There is nothing evil about rational selfishness. Do you want to live? Do you want the privilege of affording food each night, a roof over your head, and wealth that ensures your financial prosperity? You would be a fool to deny any such thing. Every man desires riches.. Be it for his and his family's humble survival, or to live the rich life. Wealth is envied, and sought after. This is exactly why the free market economic system is the most efficient system ever devised. It seeks to spur innovation by rewarding those who can think; those who can use their mind to invent, those who put their intelligence and brain power to the limits-- It rewards these people with riches and profit. It is such a simple, yet elegant system. All who can successfully delegate and utilize resources efficiently are rewarded with profit. Those who fail, are aptly punished with bankruptcy. Socailism, and government intervention prevent this natural process.
As a libertarian, I am an advocate for limited government. You should be responsible for yourself-- Both your successes and you failures. I don't want a "Big Brother" constantly looking over my shoulder and pointing me in the "right" direction. I don't believe the government knows best how to spend the money that I earn.
Studies have shown that people are much more giving when the government is not breathing down their necks, and confiscating so much of their money in taxes. I believe we need to end every social program sponsored by the government, and cut the government down to what it was designed for-- defense; Protection from crime and military aggression by other States. But aside from that, you're on your own. The government should not be giving MY tax dollars to people who make bad decisions-- Those who are too lazy to attend school, too irresponsible to know the consequences of their own actions, etc.. The looters of the world seek to gain free health care on my work. I cannot, and refuse to hold the weight of the heavens on my own shoulders.
"I swear by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine." --John Galt
I oppose the health care legislation based on the simple premise that no man can hold another at the point of a gun, and demand service. I believe people need to take their own responsibility, and live with the consequences of their actions. Government should not be there to support you when you fuck up-- Because who wants to pay for it? Do you propose we force all the people who made the right choices in life pay for the failures of others?
The Solution
"The political system we will build is contained in a single moral premise: no man may obtain any values from others by resorting to physical force," --John Galt, Atlas Shrugged.
The solutions to health care, the abysmal economy, and all that plague this country is the same: Limited government. Open up state lines to insurance companies to spur competition, look into tort reform, and eliminate government involvement in the private sector permanently-- Including Medicare, Medicaid, and Social Security. These entities do much more harm than good.. Setting prices for insurance companies and doctors to follow. Nay, you must allow the free trade of goods.
Also note that from previous posts, the actual number of people who are LEGAL US residents, make less than $50k/year, and who truly cannot afford health care amount to roughly 3% of the population. Why should we change our system to support these people?
The Disadvantaged I do understand that people are born with certain disadvantages in life. Be it physical handicaps, mental handicaps, being born into a broken home, awful environment, etc.. These disadvantages do exist, and do pose a problem for people. However, who's fault is it? It certainly isn't the fault of these people born into these circumstances. But is it my fault? Is it the fault of everyone else? Surely not. You cannot play "Robin Hood", and take other people's money to support these unlucky few. It is not anyone's fault that people are born with disadvantages. Though, if someone personally wants to donate to charities to help these people, then they are perfectly able to do so. You are free to allocate your own money however you see fit; And I believe that this can be accomplished through free enterprise. Eliminate taxes, and people will donate more to charity and religious organizations, who in turn, will be able to efficiently allocate their own funding for the disadvantaged. Government intervention always drags inefficiency and waste with it.
Hence, people who fuck up in life and end up having ten kids by the age of 15 will have something to turn to. It is their own consequences and free will which have landed people in the situations they find themselves. Sure, bad luck may play a part. But in the end, it's your problem-- And you need to deal with it yourself. You cannot rely on people to pay for your mistakes.
Now I shall end as I began, with a lil' bit of Atlas: (577)
I seized the boats that sailed under the flag of the idea which I am fighting: the idea that need is a sacred idol requiring human sacrifices-- that the need of some men is the knife of a guillotine hanging over the others-- that all of us must live with our work, our hopes, our plans, our efforts at the mercy of the moment when that knife will descend upon us-- and that the extent of our ability is the extent of our danger, so that success will bring our heads down on the block, while failure will give us the right to pull the cord. This is the horror which Robin Hood immortalized as an ideal of righteousness. Is is said that he fought against the looting rulers and returned the loot to those who had been robbed, but that is not the meaning of the legend which has survived. He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity. He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don't have to produce, only to want, that the earned does not belong to us, but the unearned does. He became a justification for every mediocrity who, unable to make his own living, has demanded the power to dispose of the property of his betters, by proclaiming his willingness to devote his life to his inferiors at the price of robbing his superiors. It is this foulest of creatures-- the double-parasite who lives on the sores of the poor and the blood of the rich-- whom men have come to regard as a moral ideal. And this has brought us to a world where the more a man produces, the closer he comes to the loss of all his rights, until, if his ability is great enough, he becomes a rightless creature delivered as prey to any claimant-- while in order to be placed above rights, above principles, above morality, placed where anything is permitted to him, even plunder and murder, all a man has to do is to be in need. [...] Until men learn that of all human symbols, Robin Hood is the most immoral and the most contemptible, there will be no justice on earth and no way for mankind to survive.
Like many proponents of the Austrian School of Economics, I am pessimistic about the economic future of the US. I believe that we are paving the road for our own demise. I hope people begin to pay attention, because it's your future that's at stake here: that of you and your family. I'll be discussing my economic theory, and will be quoting heavily from Peter Schiff's Crash Proof (Henceforth denoted with "Schiff") along with many other sources.
The Problem
First off, what's the problem with the American economic system? Well, I'm sure most people have heard about our soaring national debt, inflationary policies of the Federal Reserve, and adherence to failed economic theories. As I write this, our current national debt is $12.5 trillion ... Which amounts to $40.6k per US citizen. Counting social security, medicare, medicaid, and other unfunded government liabilities, our debt is estimated at or above $60 trillion. This debt is unsustainable. If we are unable to quickly turn things around and cut federal spending.. We will suffer a depression the likes of which haven't been witnessed in 70 years. Why would anyone hold US treasuries or dollars? Why do you think China will continue to buy our debt?
One reason our deficit is so high, is that we have a trade deficit. Each year, we export wealth to India, China, Japan.. We simply aren't producing in this country.
The popular notion that in the postindustrial service economy money-valued services are an acceptable substitute for goods because both generate money ignores the distinction between money and wealth. Money is a medium of exchange. Wealth is what is received in that exchange. (Schiff, 10)
People seem to think China will suffer the most from selling US treasuries, which consequently devalues the dollar. This theory is far from the truth. To illustrate a parallel, I'll quote one of Peter Schiff's brilliant analogies (Schiff, 14):
Let's suppose six castaways are stranded on a desert island, five Asians and one American. Their problem is hunger. So they sit down and divide labor as follows: One Asian will do the hunting, another will fish, the third will scrounge for vegetation, the fourth will cook dinner, and the fifth will gather firewood and tend to the fire. The sixth, the American, is given the job of eating.
So five Asians work all day to feed one American, who spends his day sunning himself on the beach. The American is employed in the equivalent of the service sector, operating a tanning salon that has one customer: himself. At the end of the day, the five Asians present a painstakingly prepared feast to the American, who sits at the head of a special table built by the Asians specifically for this purpose.
Now the American is practical enough to know that if the Asians are going to continue providing banquets they must also be fed, so he allows them just enough scraps from his table to sustain them for the following day's labor.
Modern-day economists would have you look at the situation just described and believe that the American is the lone engine of growth driving the island's economy; that without the American and his ravenous appetite, the Asians on the island would all be unemployed.
The Asians, and Chinese in particular, would benefit from our demise. As a nation of purely services, we basically exchange services among ourselves (Hence, the American is a customer of himself). The few things we export are easily overtaken by our vast imports. The manufacturing and exporting of Televisions, gaming systems, computer systems, building materials, food, etc... actually involve the exchange of wealth. We are exporting wealth to other nations as we sit on our asses and enjoy their toils. This can't last for long.
My favorite of Schiff's analogies is the "Tale of Two farmers". It's long, so I'm simply going to paraphrase (Schiff, 21-23):
There are two farmers: Chang and Jones. Chang grows only oranges and Jones grows only apples. Each grows only the fruit he produces most efficiently, trading his surplus for the fruit grown by the other. Obviously, this free trade allows both farmers to benefit. They can eat both apples and oranges simply via bartering. Anyway, this process continues for many years until a flood wipes out Farmer Jones' apple crop. Jones proposes that Chang sell him oranges in exchange for IOUs and 10 percent interest in apples for the next year. Since Jones has efficiently grown apples in the past, Chang accepts (Jones has a great credit rating ;-)). Note that the IOUs are a promise to pay, similar to treasury bonds, and do not possess any intrinsic value themselves. Payment cannot actually be made until the next year when Farmer Jones redeems his notes by giving Chang all the apples his IOUs obligate him to pay. Only then can the notes be retired and the transaction completed.
Now, assume similar natural disasters plaque Jones for several more years, and he and Chang make the same agreement each year. Suddenly, Farmer Jones realizes he's eating well without actually farming. He can import oranges without working, and without exporting any apples. He therefore decides to turn his apple orchard into a golf course, and simply play golf all day while enjoying Farmer Jones' oranges. In other words, Farmer Jones now operates as a service economy. (He, representing a single country, is primarily a service economy-- and exchanges services within the country-himself.)
Farmer Chang, by contrast, is so busy growing all those oranges that he never gets a chance to play Farmer Jones' course. In fact, he has been accepting IOUs for so long, he no longer remembers his original reason for doing so. Though, knowing no other life style, he is content. Chang now counts his wealth based solely on his accumulation of Farmer Jones' IOUs. Since Farmer Jones has such a good reputation among all the other farmers (credit rating), Farmer Chang is able to exchange those IOUs for the goods and services of other farmers. However, as a result of Farmer Jones' good reputation, no one notices that his apple orchard has been turned into a golf course. His IOUs are essentially worthless since he no longer possesses the ability to redeem them with actual apples.
Some might argue that the entire community now depends on Farmer Jones and his worthless IOUs, and that Farmer Chang and the others will simply accept them indefinitely to avoid acknowledging the reality of their folly. Of course, were these revelations to occur, the unfortunate holders of Farmer Jones' IOUs would officially be forced to realize their losses. However, their true financial situations would improve, as any future accumulation of worthless IOUs would end. As for farmer Jones, without a viable apple orchard or the ability to buy oranges on credit, he would starve. It would take years to transform his golf course back into an orchard, and regain his knowledge of farming, and replace his obsolete and dilapidated farming equipment (IE transformation of a services economy back to an industrial one). In the end, Farmer Jones' only alternative might be to sell his golf course to Farmer Chang and take a job picking fruit in his orange grove.
What a wonderful analogy, no? He writes them much better than I.
Finding the Source of the Problem
Where can the beginning of the demise of our economy be traced back to? 2000? It's all George Bush's fault, right? To the contrary, FDR and his socialist policies wrecked havoc on the Free Market system. The eventualities of social security, medicare, and medicaid plague our current financial system with enormous cost.
But, that's another issue. I'm mainly looking at the creation of the Federal Reserve in 1913 and the replacement of the gold standard for Federal Reserve Notes and a fiat monetary system. Since the Federal Reserve Act of 1913, the purchasing power of the US dollar has fallen by 95.41% (the data can be found all over the web):
You heard me correctly: 95%!! If you had taken $100 and buried it in your backyard in 1913.. You'd uncover that 2088% inflation made that $100 equivalent to about $4.57 of today. Or, in other terms, an item in 1913 costing $100 would cost you $2,188.76 in 2010.
The Vedder and Gallaway statistics allow us to follow unemployment month by month. They put the unemployment rate at 5 percent in November 1929, a month after the stock market crash. It hit 9 percent in December-- but then began a generally downward trend, subsiding to 6.3 percent in June 1930.
That was when the Smoot-Hawley tariffs were passed, against the advice of economists across the country, who warned of dire consequences.
Five months after the Smoot-Hawley tariffs, the unemployment rate hit double digits for the first time in the 1930s.
This was more than a year after the stock market crash. Moreover, the unemployment rate rose to even higher levels under both Presidents Herbert Hoover and Franklin D. Roosevelt, both of whom intervened in the economy on an unprecedented scale.
My point being, the recovery was abruptly halted when FDR made it illegal for US citizens to own gold.. He essentially repealed the gold standard in place of a fiat currency.. A currency that the government could control through the federal reserve, and thus, "tax" the people through inflation.
Since then, the value of our currency has plummeted as the Federal Reserve has devalued our currency. There's no doubt the government is doing much more harm than good. The only solution is to replace Federal Reserve notes with something that actually has intrinsic value.. Something that all people agree has value.. something that will NOT diminish nor fall to control of government. IE) Gold.
The bottom line is that rather than representing legitimate IOUs redeemable in specified weights of gold or silver, US Federal Reserve notes became IOU nothings, mere pieces of paper that bearers were free to circulate themselves, but which did not constitute any liability on the part of the issuer.
What that meant was that any value the dollar had would depend purely on its purchasing power, which in turn would depend on the financial strength of the US economy and how the supply of dollars was regulated. (Schiff, 54)
That pretty much sums up the extent of government involvement, and its destructive power over our economy. Through regulation via the Federal Reserve, the US government is able to control inflation, and dwindle the purchasing power of the dollar. All for what, you ask? Why, simple. When the dollar loses value, the interest and payments made on bonds and other government loans are also much less. In a way, the government is able to tax its people through this tricky tactic. The people are not even aware that their dollars are losing value, and that the money paid through bonds and other securities may actually place the investor at a loss due to high inflation.
The CPI and government numbers are actually quite inaccurate, so your loss may even be more than if you calculated using CPI numbers. In any case, we're delving heavily into economics.. From here, I suggest you pick up Peter Schiff's "Crash Proof", read up on the Austrian school of economics, or other means of self-education. The concepts of macroeconomics, including inflation, the business cycle, the gold standard and fiat currencies are too complex to adequately discuss here, and this post has gotten long enough already. Perhaps at a later time :-)
A Few Words on Keynesianism
Before I leave you to wander the interwebz in search of Peter Schiff and Ron Paul videos, I'd like to touch on another root cause of our current dilemma: You.
The Keynesian ideas of spend, spend, spend are greatly flawed. Savings is truly key. The invention of consumer credit has greatly hampered our economy. Previous generations lived below their means, saving wealth for retirement or the occasional big purchase. I believe government involvement and especially social security have given people a false sense of security.
Now, people are taking out second and third mortgages, ramping up thousands of credit card debt, and essentially spending well above their means. The purpose of credit was to make an investment that you believed would net you a nice return. People and businesses took out loans and used money they did not currently possess to make investments that were thought to earn them enough money to pay off the original loan and interest, as well as plenty for their own profits. IE) College education, purchase of capital goods-- Say, stoves for cooking companies, renovation, etc.. were all investments in which a return was anticipated. Nowadays people take out loans to buy cars when they have perfectly functional vehicles.. Purchase big screen TVs and gaming systems to keep up with the Joneses.
You see, when you make those "investments", you end up paying more for those purchases through interest. Sometimes, a whole lot more. So, why not be patient and buy the item when you can afford it? You end up paying much more for it, just to have it sooner. This overspending cannot be sustained. Eventually, like in the housing crisis, something you depend on for income will vanish. Then what?
What happens if there's a natural disaster or some other emergency? Whatever happened to saving for a rainy day? Savings, and the wealth accumulated through interest paid to you through investments (stocks, bonds, etc..) will result in much higher gross wealth than those who overspend. Blessed are those who are thrifty and live at or below their means :) These people are predominantly those in Asia. Their patience will be rewarded. Our demise is their resurrection.
If we don't take some drastic measures now, then we are doomed. The world reserve currency status is the ONLY thing keeping us alive at the moment. As previously discussed, our overspending and high debt will eventually lead to other banks and countries to dump the dollar for something more credit-worthy. Federal Reserve notes are nothing but fiat currency, essentially dependent on the growth and prosperity of the United States.
But, if we cannot recover from our deficits, we will no longer be prosperous, or have a perfect credit rating. The dollar will fall... And I'm not talking 5-6%, I'm talking hyperinflation. Why would anyone own Federal Reserve notes when the US economy isn't even producing anything? Our golfing has run its course.
Again, we are saved by one thing: World Reserve Currency status. Other national banks are required to keep dollars on hand to trade in commodities. This creates artificial demand for the dollar -- a demand that would not otherwise exist. Hence, as long as other countries accept this and want dollars, we will be fine.
However, I would not count on sheer ignorance for long. We will eventually be found out, and the dollar will fall. Your investments, retirement plans, and life savings will be worth nothing. The only true hedge is to invest in gold, silver, or some other precious metal-- Something of intrinsic value. Once the shit hits the fan, gold will appear to skyrocket relative to the dollar (I like to think of gold as the standard, and any movement of the price of gold in dollars as movement of the dollar. The price of gold is fairly stable.).
And my favorite video of all time. A clever "rap" pitting Hayek and the Austrian school of economics up against Keynes and Keynesian economics. Enjoy :)
Since the Health Care bill has passed both houses of legislature, and the draft of the final bill for Obama to sign is in the making... I wanted to comment on the significance of its passage.
Over the months, I've stressed my many reasons as for why I believe this bill is despicable-- The horrid service it will bring, the inexplicable tax burden on most Americans, its social injustice and direct attacks on freedom, etc.. However, one key issue is always overlooked.
Often, you hear people debate whether or not health care is a right or a privilege; Despite the claim that this is only a moot point, I seek to argue that it is not, and in fact, this is the best argument against the future health care system.
I wish to quote a passage from a popular 20th century novel, "Atlas Shrugged":
"Do you know what it takes to perform a brain operation? Do you know the kind of skill it demands, and the years of passionate, merciless, excruciating devotion that go to acquire that skill? That was what I would not place at the disposal of men whose sole qualification to rule me was their capacity to spout the fraudulent generalities that got them elected to the privilege of enforcing their wishes at the point of a gun. I would not let them dictate the purpose for which my years of study had been spent, or the conditions of my work, or my choice of patients, or the amount of my reward. I observed that in all the discussions that preceded the enslavement of medicine, men discussed everything-- except the desires of the doctors. Men considered only the 'welfare' of the patients, with no thought for those who were to provide it. That a doctor should have a right, desire or choice in the matter, was regarded as irrelevant selfishness; his is not to choose, they said, only 'to serve.' [...] I have often wondered at the smugness with which people assert their right to enslave me, to control my work, to force my will, to violate my conscience, to stifle my mind-- yet what is it that they expect to depend on, when they lie on an operating table under my hands? [...] Let them discover the kind of doctors that their system will now produce. Let them discover the kind of doctors their system will now produce. Let them discover, in their operating rooms and hospital wards, that it is not safe to place their lives in the hands of a man whose life they have throttled. It is not safe, if he is the sort of man who resents it-- and still less safe, if he is the sort who doesn't."
Wow. That just sums it up perfectly, doesn't it? Similar to "Atlas Shrugged", we have allowed the looters to take hold of us, to transcend our own moral codes and trick us into believing that it is for "the greater good". I say, do not let them take our freedom! Do not allow the looters to spread their filth, and contaminate everything they touch; this is just the beginning. Why do we have a right to a service? Who are we to demand that the doctors exist for out own need? The thought is utterly despicable.
We have no right for health care, same as we have no right to dental care, rent movies, watch television, fly on airplanes... And why should we? The free market system has provided us with a service. There is a cost, should we wish to purchase the service. We are lucky to have such a service offered to us at all. I am not denying the claim that millions cannot afford health care. However, since when has need demanded payment? In accepting this bill, we are accepting the idea that the looters have a right to demand other's earnings on the behalf of the needy. A certain slogan comes to mind, doesn't it? "From each according to his ability, to each according to his need" Since when have we abdicated our freedom to the looters and men who wish to enslave our bodies and minds? Why should we accept their idea that need constitutes tribute? What world do we wish to live in?
What prospects do we have for the future? Assuming the Liberals are allowed to continue their destruction of the America our forefathers fought long and hard to protect... what can we expect to see?
It's revolting how this administration has absolutely no regard for the constitution whatsoever. I mean, Obama never even released his birth certificate, a prerequisite for becoming President. He has trampled the damn thing since he's been in office as well. I mean, he has a team of fucking czars. Czars! This term is known most from the emperors who ruled Russia-- So, Obama sees himself as someone who transcends Kings? But of course, most of MSM will tell you he is the messiah... So, "God" may not be a title far off.
So, what? He decided to appoint a team of "Kings" with unlimited power to do his bidding. Does that sound like America? How about the idea of telling you how much money you are allowed to make? His pay czar is already enforcing such policies with banks and financial institutions. Who the fuck are they to tell you how much money you can make? Whatever happened to the free markets? Innovation? The concept that if you work your ass off, then the sky is the limit? Well, not anymore. Obama sets the limit well before take-off.
How about this new proposed health care plan? A team of government-appointed "professionals" (We know those two terms can't go together) to decide whether or not you get health care. Now that's scary in and of itself for many reasons. Mainly, the restrictions on free-speech. It's rather quite ingenious. Instead of coming out and straight-up limiting free-speech.. The government will seize control of the media by bashing those who oppose (such as calling Fox News 'not a real news organization').. They will gain control of the papers through bailouts that they've already said are plausible. You thought the Times was left-wing now, just wait until they're receiving checks directly from Obama and his media czar. It's despicable the amount they are allowed to restrict free speech.. You think Glenn Beck's family would be treated the same? Would they be able to receive a life-saving operation if it was needed? The fact you have to sit and think about it, is sickening.
1984. People have said such a dystopia could not happen, because Americans would not allow it. I cannot help but to laugh.. Do you think socialism occurs all-of-a-sudden when its people oppose it? Don't be a fool. We receive just a pinch at a time, until the public acknowledges and grows to accept the Change. This is what America has been exposed to over the past several decades.. Since FDR. However, what happens when the people have a love interest in their President? That's when we have problems. Look at Hitler-- He was a great orator. Hitler was able to get the people on his side.. They loved him, and would do whatever he said. This is _dangerous_. We don't want people to cede their minds to the elected. We don't want people to even trust those with power. We want all policies, all proposed legislation to be scrutinized extensively. Changes in government and the amount of power the entity has is not to be taken as a grain of salt.
However, this is what has happened. People loved Obama's message of "Hope and Change". They refuse to acknowledge the fact that he hasn't done a fucking thing. Obama is the worst president in history, and it hasn't even been a year yet. He can do whatever he wants, and he is not challenged. No one stands up to him, no one challenges the constitutionality of his czars. Americans are more concerned with their "American Idol" or some other idiotic television series. People need to wake the fuck up before it's too late. I fear for the future. If nothing impedes Obama and his Liberal cronies, he will destroy America. He will destroy what our forefathers fought so gallantly to achieve-- A country free of tyranny.
I've been intending to write a new post on this blog for a while now, especially since I ran across this in Google Reader. I've many thoughts circling my head, and so I shall try to organize them in this post-- Though, it will be one of much less substance and cited sources.. and more of just me.
So, I've been following Obama *very* closely over the past year. I am not searching for flaws and failure, but I see it every which way I turn. It seems the more that is discovered about this man, who was a nobody a few years back, the more I cringe. While our troops fight gallantly and require a commander-in-chief to lead them, he is absent; While our economy falters and uncertainty lay ahead, he is nowhere to be seen; While the Democrats blame Bush and play petty politics, gambling with our wealth and future, there is no Great Compromiser. Our leader is absent.
As myself, and many others predicted, Obama has done very little in this past year. He won the Nobel Peace Prize, but for what? Afghanistan and Iraq are in the worst shape in many years and our Generals have begged Obama to send in more troops. Around the world, Americans are no better liked-- The Russians, I feel, have been much more aggressive in foreign policy and have been met with appeasement from our administration. Obama has not been able to quell resistance in the Middle East nor the fighting between Israel and Hezbollah. Ironically, the only Liberal president who did well internationally and probably deserved the high honor, has never received it.
Now I shift to health care once more. Again, I highly suggest you read the article I linked earlier-- It debunks most, if not all the claims that the left have made about our current health care system. It clearly shows our health care system is not the worst-- We have had low costs, pharmaceutical spending, and high life expectancy rates relative to the rest of the world. True, our health care system is not the best.. but that is simply because government is already too much involved in the way of medicare, medicaid, social security, etc..
HHS Secretary Kathleen Sebelius issued a "gag order" prohibiting insurance companies from informing Medicare-plus enrollees that the health plan would result in a discontinuation of their private secondary insurance. Additionally, the leadership in Congress has refused to post the working bill online. What are they hiding?
You want to know how to make our system better? *LESS* government involvement, not more. A few months back I attended a Town Hall Meeting, where I brought this up-- The fact that medicare and medicaid have socialized medicine enough. They set prices which private insurance companies must follow in order to stay competitive. We must look to eliminate such government involvement in health care as well as into tort reform. Why not restrict frivolous law suits which are filled by loved ones who are (understandably) frustrated? Doctors aren't miracle workers. Also, why not allow companies to compete across state borders? These regulations on free market capitalism are ultimately destroying it. The answer is less regulation, less government involvement.. Why the hell can't politicians see that?
I frequently hear people ask, "how can someone with an illness obtain insurance?" If you think about this for a moment, the question doesn't make any sense. It would not make sense for an insurer to insure someone who already had incurred the insured risk. What the sick person needs is care, not (necessarily) insurance.
it is not clear a priori that the cost of care would be too great for the ill person to afford. Current prices for care are quite high, but the prices of health care as they are now have a lot to do with the four-party system. This has resulted in a system where prices are high in part because we have insurance, yet we must have insurance because prices are so high.
These companies are offering you a service that they don't have to. Insurance isn't delegated in the constitution as something that must be provided to citizens. It's a privilege. Those insurance companies need to make a profit too, else YOU will lose coverage. Besides, without the government sticking its big nose in the industry, companies will finally be able to actually compete in a capitalist system-- Which will result in much lower prices.
Now, for the biggest dilemma affecting the administration... the economy. We absolutely CANNOT continue the way we are, spending without any regard to the consequences. Politicians fail to understand a simple truth that my 11-year-old brother knows-- money doesn't grow on trees. But do they care? "Ah, hell.. this is the US economy.. we'll recover." Fallacy. Just because we have yet to fail does not mean we will live on indefinitely. And fail we will. Zimbabwe's inflation troubles are nothing compared to what the US will face. Our national debt is well over $12 billion, with even more planned spending. This is a very serious problem which poses some serious consequences. Now is the turning point. If we don't soon cut spending and attempt to recover from this deficit now, then we never will. There has already been talk of dumping the US dollar as the Reserve Currency-- which would result in more liquidation of US dollars on the market.. Not to mention the affects should China realize that a US investment is no longer a AAA rating investment. Peter Schiff and Ron Paul say it best when they warn of a collapsed dollar. I've invested in the markets for quite some time, but recently I've begun shifting away from anything that is held in dollars. Why, you ask? The Dow is back to 10,000, so what's the trouble? Well, that's wonderful-- The Dow could hit 100,000, but if the dollar aint worth 1/100th its original value then you've just made a terrible investment.
Our government is drunk on power, and greedy for whatever you will allow them to take. They no longer require your vote for power; Obama has demonstrated time and time again that he will simply do whatever he wishes. As with his czars, Obama is socializing America... taking freedoms one at a time until you wake up to find that Orwell's dystopia was only several decades off. I fear for the future. Wake up America... Wake up before it's too late.
On my way in to work this morning I was listening to Talk Radio, and they mentioned a point which has been discussed before-- Obama's "death panels" and how they would effect the elderly. The Mainstream Media has laughed down these discussions, and I even had to turn off "The Daily Show" this week because of the extreme liberal propaganda... The truth is, bureaucrats will be deciding your loved one's fate. It's a paramount part of every socialized, government-controlled healthcare program.
Let me run down the basic logic for you: Those who contribute most to society-- The young and those in the work force will be priority one. The government needs these people to survive, since that's where their income is coming from. The elderly, terminally ill, and people suffering mental ailments which limit how they can work will be expendable. By a logical Utilitarian argument, this all makes sense: It's for the greater good of society. Those who are old should be euthanized or refused medical treatment since they're about to die anyway, and they are just wasting resources. However, is that really what we want? As Palin said, this plan is downright evil.
The United States of America is not a democracy; We are a republic. The difference being the former requires only a majority decision. If the majority of the population want to kill all people once they hit 65 years of age, then it is legal. A republic system of government is centered around rule of law, and protection of minority rights. Regardless of what the majority of the population desire, the basic law is upheld for all. Thus, in our system it should _not_ be legal for other people we do not even know to make life and death decisions about us. It's complete bullshit. I refuse to stand before a judging panel and try to make my case for why I think I should receive medical treatment. I refuse to stop caring for the elderly. I refuse to surrender my freedom of choice, to the government.
