Our President blames the Bush Administration. Many on Wall Street are now blaming Obama. Democrats blame Republicans. Republicans blame Democrats. Who really is at fault for our economic troubles?
The answer is rather simple.
Government and those that proclaim it can solve so many of our problems – regardless of their party.
In 1959, in an interview with Mike Wallace, Ayn Rand posited that:
“A free economy will not break down. All depressions are caused by government interference and the cure that is always offered . . . is more of the same poisons that caused the disasters.”
Of course, Rand was speaking in the wake of the Great Depression. After the market crash, government sprung into action to save the day. The government raised the top tax rate from 25% to 63%, then to 79% and then to 94% and choked off capital formation – the lifeblood of CAPITALism – you see, it is right there in the name. The Government also allowed the money supply to shrink by 1/3rd and spread the Depression around the globe by cutting off trade. That turned a significant recession into the Great Depression.
Not so, according to FDR. Roosevelt thundered that ‘The rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence . . . Practices of the unscrupulous money-changers stand indicted . . . in the hearts and minds of men …’ So what was FDR’s answer? The same poison that caused the disaster – government action.
Today, the overall tax burden – what the average household pays – is close to the highest in our history. We are regulated at unprecedented levels. The government housing policies resulted in an inflated market and a market crash. The same Federal Reserve that allowed the money supply to shrink by 1/3 in the ’30s recklessly raised interest rates this decade and set off housing deflation. If that was not enough, government has allowed the oil supply to be choked off and that too contributed to our crisis in the form of way over priced gasoline.
What is the Left’s prescription for what ails our economy? More of the same poisons.
Our government has grown from just over $120 billion budget in the mid 1960 to nearly $3.7 trillion today. We transfer well over $1 trillion dollars a year in redistributive policies to “fight poverty” – yet despite spending untold trillions – our poverty rate has remained nearly constant over those 40 years at 14%.
In other words, government never so much solves our problems as much as it institutionalizes them. In the case of poverty, it does so by providing nearly countless benefits to those without work and then keeps them on the dole by taking away their benefits if their private income rises. Faced with a choice of “free” benefits or earned income, government induces millions to remain dependant.
It is story hoary with age as Ayn Rand notes. In other words, the more things Change, the more they stay the same.
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