The New York Times, in their editorial “The Republican Wreckage”, makes an almost humorous claim: “House Republicans have lost sight of this country’s welfare.” Don’t be confused, there’s not a whole lot of difference between an establishment Republican and an establishment Democrat, however in this entire, sad situation, the House Republicans actually voted on and passed “Cut, Cap, Balance”. Apparently, Mr. Boehner dismissed the President’s “plea” for compromise.
And why is compromise such a good thing? According to President Obama, Republicans are violating the country’s founding principle of compromise. Again, if this wasn’t serious I’d be laughing my butt off. Here’s the irony: In order to stick to the principle of compromise (which isn’t really a founding principle in my opinion), we must compromise every other principle this country was founded upon.
Apparently, Republican’s desire to cut spending due to massive debt has pushed this country “to the brink of ruinous default” and “dimmed the futures of millions of jobless Americans, whose hopes for work grow more out of reach as government job programs are cut…” This should be in the comic section of the New York Times because I’m cracking up over the humor here. So, let’s see if I understand the editorial. Recent Republican action has our country near bankruptcy, not 100 years of federal government overreach, Federal Reserve policy, a constantly growing government, more redistributionist programs, and more recently, government bail outs and so-called stimulus plans.
And dimmed futures for millions of Americans? The implication here is that government spending will save millions of unemployed workers. Does the editorial section of the New York Times have any understanding of economics? It doesn’t appear so. Removing wealth from the private sector is exactly why our country has the unemployment it does. Government does not produce anything and cannot create jobs without first confiscating that money from the private sector. As government grows and increases the debt, the private sector not only loses capital through taxes but also suffers because the government is consuming limited resources through borrowing and spending.
So what effect do the actions of government have on interest rates? Well, according to the New York Times, the desire to cut spending and debt will push interest rates higher. The fact is, through the Federal Reserve, interest rates in the United States have been held artificially low for a very long time. What the Federal Reserve does is a form of price control. You can think of interest rates as the price of borrowing. The lower the price, the more people will borrow. It’s signal to the market place that materials are abundant for growth and expansion. Borrowers borrow, invest, expand, build new houses and apartment complexes all because the interest rate signal tells them resources are abundant. What the Federal Reserve has done by price fixing the cost of borrowing is encouraged mal investment – the very thing that played a major role in the recent housing bubble. So why shouldn’t interest rates rise? It’s time the market starts making some corrections to past central planning schemes.
Cutting $2.7 trillion (it rolls off the tongue so easily, doesn’t it) over the next 10 years means nothing in terms of reducing debt and deficits. In FY 2010, the federal deficit was $1.3 trillion and in FY 2011 $1.6 trillion. In two years we added $2.9 trillion to the debt and somehow cutting $2.7 trillion over ten years just cuts too deeply, according to the New York Times editorial section. Really, it would be funny if it wasn’t so serious. The NYT claims that right now the government should be “summoning all its resources to solve the real economic problem of unemployment.” And how exactly does the government summon resources? By taking it from today’s workers and borrowing it against tomorrow’s workers. So, using the NYT editorial genius reasoning, if we take money from people and send it to Washington for them to shake around and spread to whom they deem to be qualified recipients that will help solve the unemployment problem. How, exactly, does that work and grow GDP? I’m not quite sure, but what we need is some darn shared sacrifice!
What do those who say we need shared sacrifice really mean? Do they mean that those approximately 47% of Americans who pay no federal taxes will start to pay – something, anything? No, what it means is to search out those who have money and take it. The 53% who do pay federal income taxes should try to join the other 47% in paying no federal income taxes.
What’s been lost during this whole process is why we have debt to begin with. It’s because government politicians elected by American citizens have promised too much of other people’s money to other people. Wealth transfers up, down, and sideways. Banks, corporations, unions, individuals and organizations are all looting the American taxpayers through our political system and elected officials.
What’s the answer? Restore the protection of life, liberty and property. Any system that takes, through force, one person’s belongings in order to give it to someone who has not earned it is a system based on injustice. This system violates liberty and property. The politicians and the pundits can scream red team, blue team, and haggle over which ten year plan is the best, but nothing will restore our Republic without the people of these United States discovering the history of our founding and what this whole experiment was meant to be – and meant not to be. Only when the people of these United States begin to put the law back into its very small cage will our debt problems be addressed. Until that time arrives, hold on because it is going to be a bumpy ride!