Flurry Economic Times From Past
of the government programs to help the housing market, foreclosure relief, first time home buyer rebate program, low interest rates, etc., have been total failures and have just wasted more taxpayer dollars while delaying the eventual cleansing of the market of excess inventory and bad credit risks.
* We should have learned, something our politicians never learn, that just about everything in the world is connected to everything else. Thus, by trying to fix the energy problem with a poorly thought out and failing corn ethanol program we not only fail to fix that energy program but we also cause economic troubles in food market. To solve any problem in life, one must understand the root causes and the interconnections within each problem. Our politicians have a very difficult time with that concept.
* We should have learned that it is never a good idea to step into the private sector to protect stupid executives and failing companies from themselves. General Motors never should have received any bailout money. They could have gone through bankruptcy proceedings like most other companies without government help, they would have emerged from bankruptcy and still have been a viable business without taxpayer help. Now, the American taxpayer will never see a positive return on that money, the Chinese government now owns more than 10% of the company as a result of how well the American taxpayer backed the company, and the company itself is on the verge of making more cars outside of the United States than within the country so we do not even get the benefit of more U.S. jobs for out taxpayer dollars. No company should ever be too big to fail. Let them fail, its called the free enterprise system.
* We should have learned, based on the GM example and the bank bailouts, that government should end all corporate welfare practices. GM’s focus will not be on the American taxpayer in the future, it will be on the Chinese consumer. The major banks focus will not be on customer service and making loans to grow the economy, it will be on how to leverage interest rates and other exotic financial arrangements to make profits. American farms are swimming in profit potential, given tight world food supplies, wouldn’t this be a good time to cut government farm subsidies to the large farm conglomerates in the country? Cut the corporate welfare practice, it perverts the true marketplace while it perverts the election process via campaign fund donations from corporate welfare recipients.
Some simple steps would help to implement these lessons:
* Step 1 – allow only individual citizens to contribute to election campaigns, eliminating the incentive for corporate welfare since the ability to reward welfare with campaign donations goes away.
*Step 2 – implment a true problem solving a process to finally solve our energy crisis without screwing up the environment or food prices in the process.
* Step 3 – implement a process to replace members of Congressional committees when they fail to perform to satisfactory levels, hopefully replacing them with people that can solve the problems facing the committees.
* Step 4 – require all elected officials to take and pass a course on basic economic theory so that they can understand how to solve some basic economic problems without making them worse, hopefully preventing us from reliving the nightmares of Cash For Clunkers, First Time Home Buyer Rebates, etc. in the future.
* Step 5 – eliminate farm subsidies, just one form of corporate welfare.
In summary, I predict we will pay more for gas in 2011 (given current gas rends), we will pay more for food in 2011 (given the three factors listed above), we will not see much price appreciation of our homes in 2011 (with all of these foreclosed coming on the market, the glut will suppress prices), we will not see a burst of job growth (not at the current high level of initial unemployment claims every week), we will not see any more tax breaks in 2011 (given the poor financial conditions of the Federal government and the states), we will not see any reduction in our national debt in 2011 (given that Pelosi, Reid, and Obama have already torpedoed the Deficit Reduction Commission without debate), we will not see GM repay its debt to the American taxpayer while it focuses overseas, and the banks are still too big to fail, probably taking too many risks but confident their friends in Washington will bail them out. Have a nice day!
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