Editorial
More Spending Is Always the Answer
Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.
Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.
Free market Austrian economists on the other hand know that times are bad because of the size and scope of government. The economy is fragile because of the overwhelming stranglehold of bureaucracy and taxation of Washington. Any jobs Washington might create through these endless spending programs are paid for through more taxation and debt put on the productive sectors of the economy. Just as insidious is the hidden tax of inflation caused by the Fed and its ever-expanding credit bubble. When the Fed steps in with its solutions, it only devalues the dollars in everyone's pocket while encouraging more reckless waste on Wall Street. All of this leads to a worsening economy, not an improved one.
And so the downward spiral continues. The worse things get, the more politicians want to spend. The more they spend, the heavier the debt load becomes and the more we have to spend just to maintain our interest payments. As our debt load becomes unsustainable, the alarm of our creditors increases. It is becoming so serious that our credit rating, as a nation, could be downgraded. If this happens, interest on the national debt will increase even more, leading to even higher taxes on Americans and inevitably, price inflation.
Still, Washington is full of talk of more regulation, more taxation and more spending. The Senate is still struggling to pass a massive regulatory increase on the financial sector, even as the stock market suffers more shockwaves. Pay-as-you-go rules give the appearance of fiscal responsibility, but in truth these rules are only used as a justification to raise taxes. Spending programs like healthcare reform, increased military spending, and a recent doubling of destructive foreign aid are viewed by Washington as necessary and reasonable, instead of foolishness we absolutely cannot afford.
The people understand this, which is why there is so much anger directed at politicians. Washington needs to change its thinking and adopt some common sense priorities. The Constitution gives some excellent limitations that would get us back on the right path if we would simply abide by them. The framers of the Constitution understood that only the ingenuity of the American people, free from government interference, could get us through hard times, yet Washington seems bent only on prolonging the agony.
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Posted by Romney on 02/16/10 12:11 PM
The Roman Empire did NOT decline due to authoritarianism. Rome was a republic up until Julius Cesar basically announced himself as permanent curator, for which his friend killed him. Until he, Rome was run as a Republican Democracy, similar to ours, where the senate and generals of the legions chose a person in charge of the military, and another in charge of the senate.
Both of them ruled supposedly equally (sometimes did, sometimes did not). But ROME actually FLOURISHED during the dictator years, Julius, Augustus, et al single-mindedly moved Rome from a tough provincial power to world dominance with an army of only about 150,000 (at one time about 300,000 max, but typically not that many).
With ONE MIND, Rome could be directed to do what was in the Emperor's best interest, which, being the beneficiary of Roman life, typically was what was best for Rome, although many land-owning Romans died or lost their land serving in the army for years, without recourse, which brought on other problems. No, ROME died because they were no longer innovative and the rest of the world caught up.
But don't cry for Rome, the Roman Empire lasted until 471 AD and the Roman way of life lasted until the fall of the Ottoman Empire in the 1800's to the British Empire. What we should learn from all this is that it is highly likely that we will too turn into a dictatorship.
But beware, I believe it will be a conservative, not a liberal, who will seize the reins: he will have the respect of the military, and he will have the backing of business and about 1/3 of the masses who follow his ideals (ironically, the same percentage of supporters from the masses of the American Revolution). I am a libertarian, so it won't be me.
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Posted by F.brueckmann on 02/15/10 10:28 AM
Ron Paul is on the money. We really need a new political Party- The Non incumbant Party (NIP) open for Democrats, Republicans, Tea Party-ers.
No one seems to understand that what happened in Gibbon's "Rise and Fall of the Roman Empire" is happening here in USA and for the same reasons. The results should be the same if we don't use the NIP.
Reply from The Daily Bell
Because Gibbon believed the primary cause of the Decline and Fall of the Roman Empire was due to a decline in civic virtue. This was actually a secondary cause. The primary cause was the abandonment of the republic itself, the decay of free markets and the subsequent rise of authoritarianism. The "I Claudius" books are a bit better in this regard than Gibbon ...
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Posted by Alan on 02/14/10 02:16 PM
I like Ron Paul's ideas but unfortunately he will never be president. With his ideas, big business will not support him, so no money no presidency.
I think there are two ways out of our mess. Cut everything and put more people out of work and have to use the military to suppress riots or spend our way out. Devalue the Dollar and pay off our debts with worthless Dollars and hope the economy catches up.
I think we are going the devalue/inflation way. The mess we are in is way too big for spending cuts to do any good in a couple life times.
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Posted by DRUNK AND DISORDERLY on 02/13/10 11:13 PM
I very much appreciate and agree with Ron Paul. There is only he, and a very few others in positions of power, who understand how dire is the condition of our economy. There are no soft and gentle solution to the problems facing our nation. At this stage, it really doesn't matter who is in charge or what is being done. Do the math; our economic situation is untenable.I have a very clear mental image of the New America; a very scary image that goes beyond this post. Simply put, CYA, Good Luck and Goodnight.
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Posted by Adrian W on 02/13/10 05:35 PM
Washington seems bent on only prolonging the agony? No, the main goal is to totally destroy the American economy! They have a deathgrip around the American citizens' necks, economically. Best way to destroy a nation. The intentions of this are already known, aka, New World Order.
Consolidation of governments, nations, and power. So the real question is how to stop it? Thats what needs the focus.
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Posted by Jerry Welch , Author on 02/13/10 02:54 PM
An answer can only be found within basic principals of economics found in free enterprise--books must be balanced, cannot spend more than you take in, sales minus expenses should spell profit, not loss...we all know this.What we are not seeing from the other side of the veil could be stated by re-writing a sentence in the 3rd Par.:
'Times are bad because of the size and scope of a type of government called Corporacracy and the corruption that it has spawned.A proverb that makes sense states: 'Follow the trail of money'.
That trail would take us directly to corporate "leaders" who have siphoned billions not only from the people(taxpayers), but from the government as well. And the government has not only allowed it, but in some areas has encouraged it.
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Posted by Frank Ross on 02/13/10 01:17 PM
Hopefully his son Rand will join him in congress. With the demise of chronic alcoholic and menace to society, Patches Kennedy, we may enter 2011 with an interesting scenario in congress:
Pauls 2, Kennedys 0
At least something to look forward to during these dark days of Keynesianism and socialism.
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Posted by David Friedman on 02/13/10 12:50 AM
In 1980 I cast my first vote in a presidential election. I was dope smoking conservative and voted for Reagan. By the time the first George Bush was half way through his first and only term, I was through with Pols, through with politics, and disgusted with the system. I still can not understand the Reagan apologists.I abstained from voting until Ron Paul's run in 08. Finally there was an honest statesman running for office. I made my first, second and third political contributions, all to Ron Paul and all happily given.
We need many more Ron Paul's in order to turn this bloated, war mongering, liberty eating, illegal government back to the principals on which we were founded. For now however, I am just glad we have the one Ron Paul.
