13 August 2009

Another Discussion: Government and the Fed

I want the government to stop interfering in the economy. The government caused the economic meltdown in the first place and now they think they are going to fix it? Yeah right. Supposedly the economy is all better (at least that's what we are being told by the government). Only 10% of the stimulus has been spent and there is over $70 billion in TARP repayments just sitting there. IF the government wanted the economy to get better they could take the remaining "stimulus" funds that are not yet allocated and the TARP repayments and combine them into a tax credit for every American. If they did that they would be able to give every tax payer $8000. Low taxes + small government = economic prosperity. That formula has worked throughout our history. Our biggest problems economically began early in the 20th century when the government began disregarding Constitutional limitations and creating bloated and inefficient bureaucracies. When government began dictating economic conditions and started social engineering, it caused the normal market forces to short circuit. That's why the value of the US dollar has plummeted ever since the Fed was created in 1913. That's why out national debt continues to snowball. That's why there is so much economic volatility today. Not all government intervention into the economy is bad. Some regulation is desirable. The problem today is politicians use taxes and regulations to reward their friends and political allies and to punish their enemies. Government has too much power and the people inhabiting high office are up to their ears in corruption.
The problem with the Fed is that it is accountable to NO ONE. The Fed had a big hand in causing the economic crisis we are in now. The Fed is directly responsible for causing numerous recessions in the past. Sometimes the Fed has acted reasonably in the past and helped stabilize things, but most of the time it has created chaos. Lag times make anything they do risky. Often they act with no outside authority or any oversight.