Yes, I remember. Bush Sr. had to raise taxes to help cover the deficits and the war. Because of that as well as the recession, he didn't get his second term and Clinton won.
But you know, the problem got solved and it set us up for one hell of a ride in the 90's. Unfortunately, a decent portion of that ride was Greenspan's overly easy use of monetary policy...otherwise, known as the "Greenspan Put".
The bottom line is that I'd like to see the government get out of the currency manipulation business. They make a mess of everything and blow spectacular bubbles only to watch them burst and wonder why there's such a mess.
That just reminded me of a hilarious story. When my son was very young and still in diapers, one day he had done his business in his diapers. He then proceeded to walk around telling everyone in the family that they stunk. "You stink, daddy. You stink, mommy." It was hilarious. Of course, it was him who stank. So he himself was the root cause of the stink, but he blamed it on everyone else. He just couldn't fathom that it was him that stank, because everywhere he walked the stink filled his nostrils.
Same thing goes with the Fed. They use sophisticated sounding words, like Quantitative Easing, cost-push, demand-pull, along with amazing theories, all to weave a fantastical story around why the economy is so stagnant or jobs aren't rising. They blame the investing class by calling them "speculators" or they blame corporations for hoarding money. Or they blame the consumers for not spending enough. Or they create large institutions like Fannie & Freddie that create incentives for malinvestment and then are surprised when those institutions fail. It all boils down to the same thing. The Fed has become a monster of gigantic economic impact and intervention in the free markets. The mass perturbations and waves in the markets are caused by the Fed and then they use every theory, excuse, and sophisticated semantics to push the blame elsewhere. But that game is now coming to an end. The bubbles have been bouncing around everywhere, but now the last bubbles are in place...in Treasuries and MBS and bonds and stocks. Now that QE Infinity is here, the Fed really is out of bullets. Printing is the only thing left. The end will destroy wealth in massive amounts.
We need to "End the Fed" as Ron Paul says, and let our currency and Treasuries float freely with government intervention in either made illegal. Then if the American people want to spend money on something, then Congress needs to increase taxes or try to sell debt at market rates. If they can do neither, because the American people want too much spending but don't want to bear the costs of it, then the American people are held accountable.
This free lunch that Americans want at all levels must end and the Fed that supports that addictive behavior must also be ended. |
