SATURDAY, FEBRUARY 28, 2009
Act 2 of the Government Created Financial Disaster
That a total budget of $3.6 trillion with a deficit of $1.75 trillion could even be considered as a viable approach by Congress leaves me dumbfounded. I can only assume that everyone in Government has lost all connection to reality.
This budget is wrong for several reasons:
1. It relies upon failed Keynesian labor based economic theory. That is the theory that Government can spend money on anything that puts someone to work and this will fix the problem. This approach will divert money from true wealth producing activities and prolong the recession/depression.
2. It protects and rewards those who have caused the problems; the Government, the Federal Reserve, the banking system, and consumers who believe you can spend your way to wealth. While at the same time punishing those who work, save, invest, and who have given up consumption in order to achieve financial security.
3. Funding of these deficits, which will NOT be halved by 2013, will destroy the dollar and can only be funded by the Federal Reserve printing money it does not have. Or in other words massive issuance of newly printed money which will lead to extreme monetary inflation and therefore extreme price inflation.
I am totally fed up with discussions of how we are all in this together. This is nothing but a smoke screen for taking care of the banking elites who created a financial house of cards based upon excessive Federal Reserve credit. It is a smoke screen for a massive transfer of wealth from those who believed hard work, sacrifice, and saving were the basis for financial security for themselves and the nation to those who do not.
Why is it that Government continues to believe that consumption and credit are the keys to prosperity and not savings and the accumulation of capital? My assumption is that Government cannot admit its mistakes and needs to live the lie that they are the source of prosperity and knowledge.
It is time for people to reject this failed philosophy and return to the principles of individual responsibly for themselves, their families and their communities – Government is not the answer. Wealth cannot be created via deficit spending. Wealth cannot be created via Government intervention in the markets. However, wealth will certainly be destroyed through deficit spending and future tax increases.