Dear Friends,
It seems to me no matter how many times anti capitalists are wrong or how badly wrong they turn out to be, over and over and over, they are always the ultimate authority on any subject, especially the economy… Their economic prognostications that are wrong effect our personal economics.
Today’s economy is a perfect example. The beautiful people told us that if they spent trillions of dollars on infrastructure the economy would come quickly out of the recession, create or save millions of jobs, and they would pass smart regulation that would prevent too big to fail and fix past problems with the economy and the banking system.
What they delivered is replacing some road signs that did not need to be replaced, handed out gobs of money to ACORN and other political organizations, gave bailouts to the corrupt industrialists that had a hand in the economic downturn, prop up corrupt businesses that were (and continue to grow) too big to fail, gave money to foreign banks, gave money to corrupt dictators and such blazing successes as cash for clunkers.
On the regulation front, they delivered thousand upon thousands of pages of regulation that has not addressed a single problem that led to the economic collapse, has created new economic problems, added huge costs to doing business in the US, driven up health care costs while pretending to “fix” health care, taken away much consumer flexibility in the form of credit card regulation, driven up the cost of energy through not only regulating new drilling away but reckless printing of dollars.
The results are dismal at best, the unemployment rate is still going up 2 years into the “recovery,” the number of people who have fallen out of the job market and given up is around 35%! Gdp growth is being revised lower as I write this, housing starts are dropping still, the US budget deficit has hit the ceiling, and the stock market rise is entirely due to Quantitative Easing 2, (QE2).
QE2 is simply the Fed printing dollars then spending them buying US bonds. Today the fed is buying 70% of US bonds! That means only 30% are bought by US citizens, foreign citizens or sovereign funds (other governments). QE2 is supposed to run out at the end of June 2011. People who read this blog after then will know the answer, but I believe when QE2 stops, the Dow Jones industrial average will fall off the table… Unless the Fed steps in and announces QE3. If they do that it will be purely a political tool to keep public opinion positive about the anti capitalists that run the show today in the US government.
The simple fact of the matter is the US government has over promised and has painted itself into a corner. The ability of the economy to produce the things the government has promised is being materially harmed by the government’s regulation and taxation of the economy. Raising taxes or increasing regulation during a downturn in the economy is risky but to do both is ridiculous. That is what the anti capitalists that run the US government have done, in fact the first thing they did when they came into office was to raise taxes on the poor.
Yes, that’s right one of Obama’s first action was to raise the cigarette taxes. Who smokes cigarettes? The Vanderbilt’s? The Lintilhacs? Maybe the Rockefeller clan… No, believe it or not, it is the poor who largely partake of cigarettes. So, when government raises taxes on cigarettes, government raises taxes on the poor. Balancing the budget on the backs of the poor.
Boil it down and spending will come under control. No matter how much the anti capitalist element in the US government raises taxes on the entrepreneur government spending will go down. The real question is, will it go down in a controlled manner, or will it collapse when QE3 runs out. The fed’s ability to print money will be extinguished, the dollar will be worthless and no one will be stupid enough step up to buy the trillions of dollars of bonds the US government must sell to continue the profligate spending.
Collapse or controlled, it depends if the American people fall for the anti capitalist advertisement, of Paul Ryan throwing grandma off the cliff or are smart enough themselves to see through the rhetoric. In other words stop believing the people who are constantly wrong about the economy.
I wonder… If the anti abortion people made an ad showing, graphically, (like throwing a person off a cliff for example), an abortion gleefully performed by some pro abortion politician… would that too, be acceptable political rhetoric, or would it be offensive? What is the difference?
