You can't Borrow and Spend your way to Riches

What most people need to realize now is that our govt. is going to spend borrowed money until it runs out of places to borrow, then it will expand its printing program. When dollar users and holders realize that it is just a piece of paper managed by thieves the game will end. The economy has been propped up by ever expanding borrowing for decades and we have no idea how bad it really is until we run out of willing lenders. We do not want the people who bankrupted us in charge when the poop hits the fan. They will blame it on the free market and just grab the little freedom that we have left. All future wealth and privilege will be doled out based on political connections instead of hard work and honest business dealing if they succeed.

The Free Market is the Grass-Roots Market

Liberals appear to believe that government creates wealth. The opposite is true. Private enterprise creates wealth. Workers are paid $20/hour only if they produce more than $20/hour in goods or services. Jobs appear only where that can be done. Resources and human labor are directed to where society is willing to pay for them. The free market is a grass-roots market where labor and resources are directed by the needs and desires of individuals. For government to do with central planning what the free market does with its dispersed/distributed power, it would need infinite knowledge. How else would it be able to analyze all the needs and desires of all the citizens, balance that knowledge with available resources and efficiently direct human and physical capital to where it does the most good?

Even the private sector jobs that are created in response to public spending are doomed. Any unnecessary public spending goes where the private sector would not have sent it. The jobs created in response to that public spending are therefore dependent on continued stimulus for their survival. A good case in point is the construction, real estate and lending boom-gone-bust created by Greenspan’s ultra-low interest rates supported by federally mandated liberal loan policies. The subsidy to debt was a subsidy to housing/commercial real estate, which created the unsustainable. Let’s not keep making this mistake.

When I brought up the free-market to a UI professor, he sharply told me “don’t talk to me about free markets, I am a finance prof”. Well, I still have some questions for you. Have you even read the Austrian Economists? Why did the Austrian/free market economists predict things like the housing boom/bust while you Keynesians didn’t see it coming? Why are you not sounding the alarm on the public spending trap we are getting ever more securely lodged in? European countries are at the point where their debt will be downgraded if they don’t cut public spending, and they will face downgrade if they do cut public spending because their economies are now so dependent on it. It is an ugly place to be and we are only different in the sense that we hold the world reserve currency and will try to print our way out of the mess we are in. Even a Ph.D. should know where that ends.

Healthy Business is the Key

Contrary to the assertions of some, I have not endorsed any drastic cuts to education; I would like to see education thrive. My major concern has been that we preserve the private sector business activity that ultimately funds all government spending. The idea that more and more public spending will drive us out of this long-term economic downtrend is seriously flawed. According to USA Today 80 percent of 2009 college graduates moved back home with parents. This needs to change. If we are not business friendly we are not education friendly. You cannot have the structure of government without healthy business supporting it.

I do intend to support reforms to public education that increase parental/local control, educational choice, and financial accountability/transparency. Reforms like the MAPP bill passed last year which allows students to challenge classes and move through the curriculum faster, or reforms that give parents more choice like what was done with Charter Schools. But, no, I have no plans to pull a chain saw out and use it on education. I would like to keep the chain saw busy on trees so that we do not have to use it anywhere else. Since govt. funding ultimately comes from logging, farming, ranching, mining, manufacturing or our recreation industry, protecting these things protects the whole system supported by them. And it is high time we stood up for our basic industries, our jobs, our friends and neighbors. We need to stand together in Idaho and defend our right to responsibly use our resources.

A related threat to the UI and some of our local schools is the liberal elitist anti-business attitude of some in Moscow. This unfriendly attitude which rejected SEL, Buck Knives, James Toyota, Wal-Mart, and LCF Enterprises is costing more than we can quantify and is anti-education.

Just Something to Think About

"The problem that governments face today is that they cannot depreciate their money fast enough to keep their debt loads “affordable” without running an ever increasing risk of wiping it out as a viable media of exchange. Their choices are quickly narrowing down to only two. Either start cutting spending drastically in REAL terms or face the collapse of the “legal tender” which is the source of their power. There is a third choice -- habitually resorted to by governments at the end of their financial tether -- war." - Bill Buckler, The Privateer, May 30, 2010