Posts tagged with Obama Inauguration

Has Stimulus Failed? Take Two

The newly elected president was left with an economic mess. The bad policies of the previous administration and unwisely taking the country to war had left the economy in trouble, with high unemployment and declining GNP. The new president decided to implement a drastic change in economic policy not long into his first year in office and was roundly criticized by his opponents. However, by August signs of recovery were already visible. August of 1921, that is. By the next year unemployment had been cut in half, and a year after that it was down to 2.4 percent after being 12 percent in 1921. The Harding administration had cut government spending in half, cut taxes and reduced the national deficit. Meanwhile the Federal Reserve kept interest rates high, thus keeping inflation down.

It's almost been a year and a half since Obama's stimulus package was passed, and have we seen comparable results? Not even close. At what point in time are stimulus supporters going to admit this policy was a mistake? The thing is, there's a playbook out there that worked. Cut down the size of government, reduce the tax burden and quit crowding out private investment with government debt. The Obama administration has gone the exact opposite direction and we aren't seeing the results. The gains in the stock market and housing prices are being offset by the declining value of the dollar. Private investment and savings continue to decline while public debt soars to new and frightening highs.

The excuse for failure so far has been that Obama was handed such a mess that recovery is difficult. Certainly that is true, but at some point in time the policies we are following will have to be examined and declared successful or failures. I would like to know how long it will take. I am suggesting two years, since that is how long it took the Harding administration to arrive at complete recovery from the depression of 1920-21.

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Getting Used to Socialism

Reading the comments regarding the state-wide smoking ban in Kansas I came across one particularly poignant comment, the gist of which was that smokers will complain, maybe a few will boycott, but eventually they'll get over it and get used to it. This is the sometimes sad, but true, nature of human beings. Getting used to things is a key to our species success--we can adapt to all kinds of conditions. We can get used to all kinds of hardships, and the incremental creep of government control is made possible because of this.

We get used to filling out required paperwork, we get used to taxation, we get used to our dollar losing value, we get used to the rising cost of health care, we get used to increased government control of our businesses, property, lives and bodies. Only instead of adapting to natural problems like droughts and diseases, we are coping with infringements upon our liberty by our fellow man.

In Libertarian circles there is a belief that the recent increase in interest for libertarian ideology, free market economics, the rising popularity of Ron Paul and the discussion about the importance of liberty and the threat posed by government signal a changing wind which will move the country back towards increased freedom and away from increased government. I, however, am not so optimistic. I think this is only a temporary uptick but that people will get used to the changes being made to our country and "get over it," so to speak. In the Soviet Union people got used to cold apartments and waiting in line for food. In the UK people have gotten used to waiting for health care. In the US, we too have gotten used to the hardships brought about by the creep towards socialism.

I think history has shown that it is only when the government is weak or the people begin to starve that revolution occurs. Our government certainly isn't getting any weaker, and considering the main problem with US agriculture has always been overproduction, it will take a long time before our economy is so ruined that we begin to run out of food. The cycle of boom and bust economics will continue, our economy will deteriorate further as the government increases control and spends its way into more and more debt. People will get upset when the next big economic crash comes, but not as upset as they were before. Eventually we'll all just get used to high unemployment, lower wages, and a lower standard of living. As government continues to take control of more sectors of our economy, starting out with healthcare, education and transportation it will spread to other sectors. Shortages will become common and people will get angry, but then they'll get used to it.

It'll only be when food starts running short that people will finally stand up for themselves, because you can't get used to starvation.

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Repeal the 17th Amendment

The 17th Amendment changes how US Senators are elected. Prior to 1913, Senators were selected by state legislatures, but now they are elected by popular vote. There were several reasons for the change, one being that occasionally different houses in state legislatures could not agree on who to send, and thus senate seats would be vacant, sometimes for several years. Also, the idea was to be closer to democracy by holding direct elections.

However, the purpose of the Senate as originally envisioned was to represent the several states' interests in the Federal Government. The House of Representatives was there to represent the people. The 17th Amendment basically makes the Senate a "Super House." The result has been that the Senate no longer acts to promote federalism since the Senators are not beholden to the state legislatures for their office. Thus the burden of protecting state's rights and state interests has fallen to the Supreme Court instead. Hence instead of increasing democracy, it has decreased since the Supreme Court has taken a larger role in restricting federal power, and that branch of government is not democratically elected at all.

In addition, the founders did not imagine that the Constitution would be simply a paper wall holding back federal power. The Senate was envisioned to be a check on that federal power since Senators would be chosen by the state legislatures to represent state interests. This helped to ensure that when there was a conflict over whether the Federal government or the various state governments should carry out some policy, if the states could do it just as well as the Federal government, they would.

These days the Senate has become very politicized and now we have ideological battles over things like Supreme Court nominations where we should not. Also it has become very difficult for states to challenge federal power. The states can sue the federal government in federal courts, but one can clearly see the problem with that. The only other thing the states can do is threaten nullification or even secession, hardly a peaceful method as this will lead to a direct confrontation between state and federal power.

The founders knew what they were doing in setting up a government of checks and balances, and removing this vital one has resulted in the present imbalance we see between state and federal power.

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Has Stimulus Failed?

The newly elected president was left with an economic mess. The bad policies of the previous administration and unwisely taking the country to war had left the economy in trouble, with high unemployment and declining GNP. The new president decided to implement a drastic change in economic policy not long into his first year in office and was roundly criticized by his opponents. However, by August signs of recovery were already visible. August of 1921, that is. By the next year unemployment had been cut in half, and a year after that it was down to 2.4 percent after being 12 percent in 1921. The Harding administration had cut government spending in half, cut taxes and reduced the national deficit. Meanwhile the Federal Reserve kept interest rates high, thus keeping inflation down.

It's almost been a year since Obama's stimulus package was passed, and have we seen comparable results? Not even close. At what point in time are stimulus supporters going to admit this policy was a mistake? The thing is, there's a playbook out there that worked. Cut down the size of government, reduce the tax burden and quit crowding out private investment with government debt. The Obama administration has gone the exact opposite direction and we aren't seeing the results. The gains in the stock market and housing prices are being offset by the declining value of the dollar. Private investment and savings continue to decline while public debt soars to new and frightening highs.

The excuse for failure so far has been that Obama was handed such a mess that recovery is difficult. Certainly that is true, but at some point in time the policies we are following will have to be examined and declared successful or failures. I would like to know how long it will take. I am suggesting two years, since that is how long it took the Harding administration to arrive at complete recovery from the depression of 1920-21.

Reply

The Income Tax is Slavery

Income taxation implies that the government owns you. What percentage of your income goes to taxes? Take that percentage and multiply it by 12 to see how many months of the year you are working for the government. Let's be honest, this isn't about making "contributions" to society, or being "patriotic" as our Vice President puts it, this amounts to the government havingA the right to force you to work against your will. This is slavery. To think that we are not slaves because we have other freedoms is nonsense:

"It is like saying that the slave is free because he is allowed to do anything he wants to do (even vote, if you wish) except to own what he produces." --Frank Chodorov

Why is the income tax progressive? The idea is the less you make, the more of your own income you "need." This is the government saying that the money is exclusively theirs, and what they allow you to keep is based on how much you need, not whether it is yours by right. If it is not yours by right, then it is theirs by right. Just look at your return. The government sets out how much you may have in exemptions for your living, your business requirements, the maintenance of your family, your medical expenses etc. Upon the rest they take what they will, and generously leave you the remainder. The 16th amendment places no limits on the amount the government can take, meaning there is no restraint on the confiscation of private property. Without any restraints, you cease to own property, you cease to own what you produce, and you are a slave.

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