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Our steady movement toward reliance on third-party payment no doubt explains the extraordinary rise in spending on medical care in the United States.

- Milton Friedman

Why anyone would turn to government to fix the economy, poverty, drug problems, and now healthcare is a mystery.  Ask yourself:  “What has government fixed in the past that has worked out well?” Offhand, my answer to that question is “Absolutely nothing.”

Take a look at the most heavily regulated industries.  Take a look at industries in which government subsidies and funding play a big role.  These industries:  education and healthcare stand out as receiving the most interference from government over the last 20-30 years.

Now, let’s look at segments of the economy that have outpaced inflation:

As we have allowed government intrusion into education and health care, the costs have skyrocketed.  So what is the simple answer to this problem?  Cut Cut Cut – reduce government regulation, reduce government intrusion, end government subsidies.  Dump the FDA, undo the mistakes we’ve made in allowing government to become more involved.

If we all start to see government is a problem, not a solution we are on the path to lower taxes and lower prices for goods and services.

We still need to work on the mess with the insurance industries.  It is a ridiculous situation where no one asks about costs, no one shops around, and everyone chooses overpriced name brands over generic products.  If everyone had some out of pocket expenses with medical care, costs would go down.  Doctors and hospitals would be forced to compete and become more efficient.

In a perfect world, we could also look at tort reform too – but do we really trust government to put together a piece of legislation that benefits the people instead of the law firm lobby (which contributed $233,912,817 in 2008)?

Filed under: American Economy, Dollars & Sense, Free Thinkers, Regulation by admin 2 Comments »

Who screwed up our economy?

Governments never learn, only people learn.
- Milton Friedman

Under Woodrow Wilson the Federal Reserve came into existence under the pretext of providing a stabilizing force to control the economic cycles.  12 years after it’s creation the longest economic crisis in American history happened.

Under Roosevelt The New Deal gave unprecedented power to the federal government.  These new powers allowed government to jump into each new disaster without worrying as much about the troublesome restrictions the Constitution placed on federal powers.  From this point forward, when situations arose, people turned to government, and government acted.  When the problems did not go away, government gained more power, more money and kept trying.  30 to 40 years with the War on Poverty and War on Drugs, government still requests money and power to fix the problems.  Do we ever learn?

Johnson turned to the disenfranchised and appealed to the American sense of decency to give welfare to the poor.  “Welfare” was an interesting name for a program.  Since the word is used in our founding documents, it must be constitutional right?  Not only did this advance the causes of redistribution and socialism, but it has also lead to the general accepted use of misdirection in legislation names.  If a ‘privacy’ bill is passed, your privacy is probably gone.  If a ‘child protection’ act becomes law, parents are probably no longer the protector of their children.

Under Clinton nothing huge seemed to happen.  It looked like we would have government health care forced upon us, but that did not pass.  One small thing slipped by, the quasi-government mortgage backers Fannie Mae and Freddie Mac were pressured to release funds to under qualified applicants.  No one, not democrats, not republicans, and very few libertarians would see this for the looming disaster it has turned into.

Under Bush we made some huge strides into fascism.  The rights of the individual became secondary to the will of the government.  Additionally, Bush gave us an unjustified war by mistake which has had crippling costs.  Finally, let’s not forget the end of the Bush years with multiple stimulus packages, each more costly than the last.

So who got us into this mess?  All of the above, plus WE let them.  It could also be said that It’s human nature.

Societies without much government interference grow and prosper.  Then they misguidedly look after the lower classes with government welfare.  Government grows, causes problems, and then grows again when everyone habitually turns to government to fix the next crisis, which comes sooner and sooner.

All the great societies of the world have fallen before us.  Now it’s our turn.  I would say it is inevitable, but we have something working in our favor that never existed before:  exponential growth of technology.

If the rapid growth of computers, the internet, and digital storage hadn’t introduced an entirely new industry to America over the last 15 years, our economy would have likely collapsed years ago.

A new industry now could prolong our way of life.  Advances in alternative energy could have a breakthrough allowing cheap and clean energy.  Medical/biological advances could add years to our lives and possible allow the skilled senior citizens to remain economically valuable in their later years.  Robotics could improve overall productivity.  Nanotechnology could build anything and everything for pennies, which we might be able to afford in the decades to come.

So what should we be doing now?  Hell if I know.  Be very wary of government that has a plan.  It’s likely that if you think our current problems are bad, just wait until you see the solutions.

Filed under: American Economy, Bailout, Dollars & Sense, Drugs, Economy, End of Capitalism, Falling Dollar, Free Thinkers, In the News, Poverty, Presidential Candidates, Ron Paul, Suckered, US Dollar, War on by admin 2 Comments »

The unions might be good for the people who are in the unions but it doesn’t do a thing for the people who are unemployed. Because the union keeps down the number of jobs, it doesn’t do a thing for them. -Milton Friedman One of the beautiful aspects of a free market system is choice.  In a free market economy you can choose which grocery store to buy from, which movies to see, and what car to buy.  Not only can you choose which companies to do business with, you can choose which to avoid. Let’s not debate the merits of Unions.  I’m comfortable with agreeing to disagree that Unions are destroying the spirit of innovation that helped make America great.  This has never been a problem in the past because freedom-loving individualists have had the ability to choose a Union-made automobile or a non-Union alternative.  That choice is now gone.  We may not be forced to buy Union cars (yet), but we are forced to support the Unions with our tax dollars.  Now, even if you buy a small foreign car with great gas mileage, you can take comfort in the fact that you are also paying for a vehicle you purposely chose to avoid. You may not agree with my positions, but do you really believe it is fair to force every American to support Unions?  This is the path we are now walking.  All Americans will be forced to support causes whether they agree or disagree.

Our tax dollars are now contributing to disastrous corporate strategies.  Are you happy about paying for CEO golden parachutes?  Nobody cares what you think, you are now supporting the cause of keeping failed CEO’s in the lifestyle they are accustomed to.  Are you a proponent of Detroit’s strategy of an SUV in every driveway?  Your representatives no longer care about your opinion, your tax dollars will be paying for that failed business mistake for years to come. Whether your cause of choice is corrupt politicians funneling money to Unions, wooden arrows, Wallstreet, ACORN, or CEO compensation packages – congratulations, you and every other American are now contributors to the cause.  Were you smart enough to realize Fannie Mae, Freddie Mac, AIG, Ford, GM, Chrysler, and countless banks were terrible investments?  Tough, you now own a piece or are financing all of them.  Plus, you have the added benefit of typical government incompetence in managing your hard earned tax dollars, they have already lost track of $300 billion of your money.  $300 billion here, $300 billion there, pretty soon this is going to get expensive.

The loss of choice just one sad consequence of allowing government to grow in power, size, and intrusiveness.  There once was a time when you could pick and choose the products you buy, the causes you support, the companies you invest in, and the charities you wish to donate to.  You are now being robbed of that ability to choose.  Now, you will be forced to give until it hurts to any cause or company politicians have deemed beneficial to their own self-interest.

Welcome to the new America:  less choice, more government.

Filed under: American Economy, Bailout, Dollars & Sense, Economy, End of Capitalism by admin 5 Comments »

“The most serious mistake that could be made here today is to blaim free market capitalism for this problem.  This has nothing to do with free market capitalism.”

“If you destroy the dollar you’re going to destroy a worldwide economy.”

Go get ‘um Ron Paul! Here is the complete Ron Paul Speech:

The bailout failed, but I am sure Ron Paul will get another chance to speak when the house pushes another ill conceived package.

Filed under: American Economy, Bailout, Dollars & Sense, Economy, Falling Dollar, Ron Paul, US Dollar by admin 1 Comment »

Speaker of the House, Nancy Pelosi spoke before the House vote on HR 3997.  Republicans are claiming the partisan nature of this speech resulted in the bailout failure.

Filed under: American Economy, Bailout, Dollars & Sense, Economy, Falling Dollar, US Dollar by admin 1 Comment »

No…

Government intervention will make the problem worse. Didn’t we already experience what happens when government interferes with the free market while Carter was president?

Speculation makes markets react faster and increases liquidity.  Without liquidity the market could be much worse and subject to larger price fluctuations.

Speculators are not the problem.  The number 1 problem is government created:  The Gulf War has cost 600 Billion dollars.  Rather than force Americans to pay for this in taxes, the government has borrowed and printed money.  This has caused the dollar to crash in value.  Oil is a commodity, just like gold, copper, and steel.  All of these items have gone up in dollars as the dollar has gone done in value.

If the dollar held it’s past value, oil would be under $100 a barrel.

Besides the crashing dollar, other significant causes are:  increasing demand from Asia, decrease in new discoveries, subsidized gas in China, and high per capita consumption in the U.S.

Speculation is a debatable factor.  I don’t think it hurts us, but I know government interference will!

Filed under: American Economy, Blogroll, Dollars & Sense, Falling Dollar, Free Thinkers, In the News, Missed the Point, Oil prices, Regulation, Suckered, US Dollar by admin 6 Comments »