As we move forward into a new administration, our economy is one of the paramount issues facing our new president. The general consensus among the electorate is that something needs to be done, and many are suggesting drastic measures and government expenditures of unprecedented proportions.
This Keynesian approach to intervention in the marketplace had been both a blessing and a curse at times, as any attempt at controlling the cyclical nature of economies can have long term devastating effects on future generations, who must eventually foot the bill for each and every course correction.
Whether the piper is paid in the form of higher taxes or long-term inflation, the damaging effects will resonate long and hard for many years, possibly centuries, to come. The necessity to "do something:" is always navigated by whichever direction the political winds currently blow.
Adam Smith, in his "Wealth of Nations," said that capitalist markets are cyclical, and are self correcting. The immutable laws of unfettered supply and demand will always prevail at the end of the day, and any efforts to control free markets are more harmful than helpful.
However, despite this self-adjusting certainty, TRILLIONS of dollars will be borrowed from future generations for temporary political expediency.
The golden goose is slain, and there's nothing that will bring it back to life.
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There is nothing we can do about it. I am exhausted.
Richard,
It's a strange and troubling feeling to feel that the country is so out of control economically, and nobody seems to really know how to fix it. We just seem to be throwing things up against the wall to see what sticks.
Rich
Mel...
Wow...no more "heavy" topics for me! This went almost twenty minutes without a comment, I haven't had that kind of response since my first post!
I guess it's back to "goofy" Richard, no more politics or relativity posts for me!
Rich...
That is perfect ... it is an excellent analogy and that is exactly what is happening right now!
Mel...
BTW I think that this is one of the best posts that I have ever written ... go figure!
Richard,
Unfortunately, we are moving away from our capitalistic roots and many people now regard that term as unseemly. :)
Steve
Richard, I totally understand your post and view here. Though I'm not sure if the administration is planning the correct move or not. Political pressure is really extreme to be proactive in this current mess.
Richard, excellent post! I can only hope that some how this works out and we're able to rebound and repay this massive amount of debt. I am not sure how that will ever happen, but I hope that it does. The last couple of sentences sort of sound like this entire approach to our economy. Good post!
Richard I think this post brought to the forefront of many minds the sad economy we are in .. while the folks are really just wanting to celebrate today for the changes that are coming. I wish all well and my hope is that nothing drastic is done to exacerbate the economic struggle my grandchildren are already facing. This my friend is a deep subject for a day of celebration. IMHO that's why you were commentless for such a while this am.
I agree, I think this is one of the best posts you have written to date. It shows the reality of what will happen as the result of our generation 'living large'. Someone will have to pay and unfortunately it will be our children and grandchildren.
I was slow on the draw because I was packing lunches and conferencing with a family moving from over seas. Business is actually picking up for me.
Steve...
You are absolutely right about that ... but at age 55, I guess I'll be on the take side soon enough! Thanks, as always.
Gabe...
The problem with politics is that it's undertaken by politicians! lol
T&D...
That is indeed, the current state of mind! Thanks you very much.
Richard: Seems both of this gentleman knew better than to monkey around with free markets. Perhaps I should consider having a child or two to help foot the future bill. :)
Richard~Inasmuch as I try to put on the happy face and express positive thoughts and words each day, I share your concerns about this economy and how we will possibly get out of this cycle. As a parent, I am worried about what my children will be inheriting as a result of our actions today and pray each day that it will get better rather than worse.
I think the question we face now is are we going to continue to embrace capitalism or is a more socialist state what everyone wants. Unfortunately, I see us following the latter.
We put ourselves in this situation by borrowing buyers from the future. People were allowed to buy homes in the present that should not have had the credit or capitol to do so for a few years. Now in order to pay for the mistakes of borrowingthese buyers, we will now steal money from the future. When you rob Peter to pay Paul, the problem is that Peter doesn't forget what he is owed and eventually he's going to want his damn money back. But no biggie, when Peter comes back around, we'll just start short changing Paul and screw over the next generation.
I agree Laura. We have been going away from the socialist model since the 80's and now it is time for the pendulum to swing back the other way. Markets are self correcting, but at what cost? If one looks at the bank panics of the 1800's and early 1900's up until the depression, one can see that wild swings in the market happen when the government doesn't become involved and they are not a good thing. During the depression, a number of agencies were set up to control the economy and if one looks at a graph, one can see that the fluctuations in economic cycles moderated since then. In the 80's and 90's we started to dispose of the depression era laws in favor of free markets. Since then, we can see that cycles are starting to become more dramatic again. Yes indeed, the government can control the economy within certain parameters, and mainly stop wild speculation. We will probably go back to that system in this administration.
Morning Richard...We have become a nation of instant gratitude, and that has spilled over into the economy. Everyone wants it fixed now and they think that is going to happen. I agree with taking some action, but raising the current Nationa; debt by around 10% in one year is a bit excessive. The other end of this economic situation could be worse than what we have now!
Richard - who is John Gault? There are those who believe that we are in the age that Ayn Rand wrote about in Atlas Shrugged. (And there are those who believe we are in the end times, also). I am not too far off from those who think Ms. Rands prophecies are coming true.
Perhaps the golden goose is not quite dead (I was going to switch to a Humpty Dumpty analogy, but....) although at best it is on life support. We need to reward productivity and success rather than promote medicrity and pursue the average. We will soon fall behind the Chinese as the world's foremost economic power, possibly decades before forecasts.
While there is some justification for moderate and limited deficit spending and government intervention, add trillions to the deficit and bringing our national debt beyond $10 trillion and on it's way to $20 trillion is neither wise nor will it ultimately be successful.
You Bail Out, We Opt Out.
All of Our Economic Problems Find They Root in the Existence of Credit.
Out of the $5,000,000,000,000 bail out money for the banks, that is $1,000 for every inhabitant of this planet, what is it exactly that WE, The People, got?
If Your Bank Doesn't Pay Back Its Credits, Why Should You Pay Yours? Or Else ...
If the Banks Get 0% Loans, How Come You Don't?
At the Same Moment, Everyday Some of Us Are Losing Our Home or Even Our Jobs.
Credit is a Predatory Practice.
When the Predator Finishes Up the Preys, He Dies. What Did You Expect?
Credit is Mathematically Inept, Morally Unacceptable.
They Bail Out, We Opt Out
Opting Out Is Both & Completely Anonymous.
The Credit Free, Free Market Economy
Is Both Dynamic on the Short Run & Stable on the Long Run, The Only Available Short Run Solution.
I Am, Hence, Leading an Exit Out of Credit:
Let me outline for you my proposed strategy:
✔ Preserve Your Belongings.
✔ The Property Title: Opt Out of Credit.
✔ The Credit Free Money: The Dinar-Shekel AKA The DaSh, Symbol:- .
✔ Assets Transfer: The Right Grant Operation.
✔ A Specific Application of Employment Interest and Money.
[A Tract Intended For my Fellows Economists].
If Risk Free Interest Rates Are at 0.00% Doesn't That Mean That Credit is Worthless?
Since credit based currencies are managed by setting interest rates, on which all control has been lost, are they managed anymore?
We Need, Hence, Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.
In This Age of Turbulence The People Wants an Exit Out of Credit: An Adventure in a New World Economic Order.
The other option would be to wait till most of the productive assets of the economy get physically destroyed either by war or by rust.
It will be either awfully deadly or dramatically long.
A price none of us can afford to pay.
“The current crisis can be overcome only by developing a sense of common purpose.
The alternative to a new international order is chaos.”
- Henry A. Kissinger
They Bail Out, Let's Opt Out!
If You Don't Opt Out Now, Then When Will You?
Let me provide you with a link to my press release for my open letter to Chairman Ben S. Bernanke:
Chairman Ben S. Bernanke, Quantitative [Ooops! I Meant Credit] Easing Can't Work!
Yours Sincerely,
Shalom P. Hamou AKA 'MC Shalom'
Chief Economist - Master Conductor
1 7 7 6 - Annuit Cœptis
Tel: +972 54 441-7640
Gail...
It's a big economy, and one that I would not like to tackle! Thanks for a wonderful comment!
Aw Mel...
My comment was directed at you... it was the lack of comments that surprised me!
Chris Ann...
SOMEBODY has to pay for my retirement! lol
LaShawn...
The amount of debt incurred is unbelievable ... your children will most certainly be forced to pay for our mistakes!
Laura G...
I agree,. (sigh!)