The State of Economics & The State of Truth

I have come to believe that what we need in the USA today is not any candidate that styles himself “just like” Ronald Reagan.

I think we need Ronnie himself. His simple straight forward manner and honesty had a powerful positive effect on this country. I know – I was there. In case you weren’t, I would like you to read two things. The first, below, is from his radio shorts – this one in May of 1975.

As background: In early 1975 the Federal Debt reached $500 billion, almost 19% of the GDP. According to the chart at http://www.usgovernmentspending.com/federal_debt_chart.html this year (2012) the National Debt exceeded 100% of the GDP.

George Meany and Economics
“George Meany talking economics reminds me of the fellow who drowned trying to wade across a river whose average depth he’d been told was 3 feet. I’ll be right back.

I knew George Meany some years back when I was an officer of a union myself. And I like him. He has been in my home on one or two occasions. But I found myself very much resenting his tirade to a Congressional Committee.

Briefly, the point he made loudly and angrily was that one problem and one alone, “unemployment” must be dealt with as if it had no connection with the entire economic situation. He demanded a greater deficit – $100 billion, if need be, to create jobs. He went on to say, a big rich country like ours can afford to go in debt.

A big rich country like ours can afford to go in hock – NOW and THEN – just as a solid citizen, with a paid up home, some insurance, and a reasonably good, safe income can borrow to meet the unusual or unexpected such as a hospital expense or just to see the kids through college. But we’re talking about a character who already has a double mortgage on his house, owes installments on the furniture and the car, has borrowed up to the limit on his insurance and is only working part time.

Even the economist so beloved of the liberals, Lord Maynard Keynes, said governments should run deficits in bad times to stimulate the economy but – and it’s a much ignored but by those who claim to be Keynesian economists – he said in good times governments should accumulate surpluses and reduce the debt.

Roosevelt said “a government, like a family, can in time of emergency go into debt, but if it continues to spend more than it’s income in good times and in bad, a government like a family will go bankrupt.” Certainly a nation must borrow to see itself through an emergency like WWII. But we have kept on borrowing till our national debt is greater than the combined debt of all the other nations of the world. We’re not suddenly faced with an emergency debating whether or not to raise a short term loan. The interest on the debt we already have is 10X bigger than our whole national budget was when we first started running deficits on an annual basis.

Yes, we have unemployment and I’ve told you before how I feel about people who want to work and can’t find a job. Few if any situations seem as tragic and desperate to me. But George Meany should know that government policies that he himself has supported and still supports are responsible for this countries insolvency, inflation and the unemployment that inflation brings. He wants a bigger deficit?

Here is what the present deficit means to the working people Meany represents; the Federal Gov’t is taking most of the available money that should be used to finance plant expansion, increase production (which reduces inflation) and provides jobs. But it becomes more personal – those things we want to buy on the installment plan the treasury department has already told the banks and lending institutions how much of their capacity must be earmarked for funding the government’s deficit. This means it will become harder and harder to buy things with the usual down payment and easy installments. And those installments mean higher interest rates. A bigger deficit means higher inflation, a deeper recession, more unemployment, and there’ll be George asking next time for a $200 billion deficit.

Sometimes I think the AFL-CIO economic advisers are the kind of economists that have a Phi Beta Kappa key on one end of their watch chains and no watch on the other. This is Ronald Reagan”

When you read that and put today’s numbers into the same picture frame – well, let’s just say it gets really ugly. The other article I want you to read appeared on Forbes online May 5, 2011. It is two pages, so when you are ready follow the link: http://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/

There is a clear way out of the hole. Stop digging it deeper! And that clearly calls for  replacement of the people who are steering the USA on this path. To be crystal clear: this has nothing to do with Democrats or Republicans. Those that need to be replaced label themselves social liberals, and they exist in the ranks of both parties. We do not need Democrats or Republicans or even Independents.

What we need are people who support and believe in our Constitutional Republic, and the Rule of Law.

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One Response to The State of Economics & The State of Truth

  1. Pingback: I Will Not Comply! | StephensonGroup.org

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