Have Obama and Geithner learned not to talk the market down? Have they decided that the problem is their confidence in the People
or are they still stuck on the problem being our lack of confidence in them? This is a question about which the Administration must think clearly. Why should we trust them? Why don't they trust us?
Why in heaven's name would it ever be a bad thing for people to save, to forgo spending? Is it not just plain and simple, long ago discredited Keynesianism to complain about the “aggregate demand?” Consumer spending is, after all, only one third of the national economy.
Click on this image to see what the recommended reading is. It goes for you, too. If you have not read this book yet, it is high time that millions more read this book before it is too late for America.
This book is about The Men of Mind on Strike.
The nation-size problems this book deals with are very much like the problems we face today. We may not yet be seeing very many “men of mind” leaving us. This is now capital on strike (hat-tip to Larry Kudlow). Our banking system is a rat-hole, short of capital no matter how much money we pour in. It is the economy on strike.
So, you want change?
Do you want Change We Can Believe In? Do you want this country to return to sanity, economic/financial sanity, health care sanity and educational sanity? Get some clues about moving in the right direction to get American on course to achieve this. Read this book!
It was first published in 1957 and has been a continual bestseller as well as an intellectual landmark. It is the story of a man who said that he would stop the motor of the world—and did. Was he a destroyer or the greatest of liberators?
Although it has been fifty years since its publication, this book has answers to today's problems.
We see all around us the growing cataclysm due to the incredible amateurism of twice-discredited Keynesian economics combined with the urge to grow government power. We see failed policies in waging war, in raising children who are prepared for the modern world (trained to understand and accomplish rather than just cooperative and obedient).
People will try to avoid the higher taxes
We can see looming failure in trying to finance the banking crisis and the Fascist spending programs. The funds that can be extracted by taxation are limited; as the economy continues to slow down, GDP is falling, tax collections also will fall. Moreover, the additional taxes that Obama hopes will come from those earning $250,000 or more, guess again. The people earning $260,000 are not dummies, and will foresee a big jump in their income tax. Due to the extra $10,000, their itemized deductions will be capped, Social Security tax will kick in, and their basic tax bracket will be 39.6% instead of 33%. Taxation could suddenly take an additional 19% of their income. Such a person would be a fool not to reduce their income by that $10,000. Check out the figures at Bob Brinker and other facts about real people planning to do this, at Bruce McQuain .
Moreover, here is a live example of someone making $300,000 who is downsizing her business, in a letter to the Los Angeles Times (look for Kay Lantos' letter).
These huge deficits will cost us spending power
We see pending catastrophe in the fiat money system, with policies that regard as harmless the printing of miles of stacked thousand-dollar bills. The new borrowings that Obama will make may be frustrated by lack of bond-buyers, as the world of investors begins to lose confidence in the U.S. The longer the manipulation of currencies and precious metals goes on, in vain, to prop up the dying dollar, the less confidence the investment world will have in the dollar and in U.S. Treasuries.
Moreover, if the money can be borrowed, interest expense will grow; fewer private loans will be available as the government borrowing crowds others out. Finally, the government spending will skyrocket the money supply. Such a gargantuan flood of money can in no way be sterilized with short-term Fed trading, selling new bonds or having repurchase certificates coming back. Moreover, we know that inflation is always and everywhere a monetary matter (Milton Friedman).
The author of the book I recommend understood what human beings need to survive and prosper, the individual rights that this requires, the use of reason that humans alone can and that humans alone must use to prosper, and the freedom that is necessary to permit this. The author presented this in brilliant fiction, followed up later with well-founded non-fiction articles, interviews and books.
Read this book before it is too late!
More broken promises
As for Obama's promises of change: why could he not live up to his promise to reduce earmarks, or pork, to less than the 1994 level of $7.7 billion? This was announced twice on his Change website, under Ethics and under Fiscal . However now Politfact reports:
“And though the total cost of the earmarks in the bill, $7.7 billion, is slightly less than the 1994 level, there were another $6.6 billion in earmarks in three previous spending bills for this year that Congress passed last year.”
Obama thinks some pork is OK. The legislators in congress must pay attention to the needs of their states and constituents. However, there is a slight problem, the constitution dictates that congressional power to spend is limited to the “general Welfare,” rather than state or constituent welfare. This kind of government is going to drive us absolutely broke!
Another one? It was revealed in the news that AIG, the giant insurer that received over $160 billion in bailout money, is going to pay out bonuses totaling $165 million. Now it is also being reported that Obama is doing all he can to prevent these bonuses from being paid. The issue is that he took an oath to uphold the very Constitution that in Article I, Section 10 forbids the "impairment of Obligations of Contracts." This could be one more broken promise.
Read this book before it is too late!
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