In today's Wall Street Journal, one of the few papers that might remain in existence, Nick Gillespie takes President Bush to task for our $8 trillion debt. Bush deserves this criticism because he failed to keep a close eye on domestic spending. I honestly believe the man was willing to let the spenders have their way on the domestic front so he could have a free hand with spending on the war.
Now you might wonder about that $8 trillion figure and with good reason because a variety of websites have posted a variety of numbers. I believe the $8 trillion comes from the global research site because I visited that one. It includes, among other things, our social security debt. That fact of the matter is that we cannot continue to have this type of debt and we all know this because as individuals we realize we cannot spend our way out of debt. Current research by historians and economists has shown that the tremendous spending during the New Deal lengthened the Great Depression by at least 5 years. Think about it, we paid farmers to stop growing food when people were going hungry. Remember the recent effect of subsidized ethanol this past summer. The New Deal actually created a Depression within the Great Depression. Keep in mind we got out of that mess with World War II.
What to do? I would recommend what Ben Stein noted the other evening, a large Resolution Trust Corporation to buy up all the toxic assets, the original plan of the TARP bill. I also want to see the repeal of the Community Investment Act and the infamous accounting techhniques called "mark to market" so that banks can safely lend again.
In closing let me note that we are in a very dangerous situation. Many and possibly a majority of us believe our politicians are corrupt. Yet we are willing to continue to allow these corrupt people to govern us and set the rules and regulations for us. I don't know about you but I consider that to be a case of collective insanity.
;)
;)
I respect Ben Stein as a good attorney and a great writer/actor, but he was totally wrong on the economy. He wrote about a year ago that stocks were sound and one should not sell anything because he asserted, the economy was too big to fail. Well, as we now know, nothing is too big to fail. He is wrong again, as buying toxic assets would simply add to our national debt. Why do you think they call them toxic? It's because they likely will never be paid off. At least by buying stock in banks, and then guaranteeing their survival through the fed, it is much more likely taxpayers will see some of their money back. The repeal of mark to market would also take us back a step, as the previous treatment of assets is what got us into this situation in the first place. I agree there has to be some modification for certain assets, but letting banks assign whatever value they wanted to assets was a recipe for disaster that we are now witnessing. Banks are currently working on a new Basel accord, so hopefully sounder heads will prevail and we won't just throw out the baby with the bathwater.