An Op-Ed from an American Majority Facebook Fan.

We are in quite the financial straits, both here in America and around the world.  The one piece of advice I keep hearing from advocates, however, is that we must spend our way to a recovery.  There is just one fatal flaw in this assumption.  Where does that money come from?  You will hear that we have the lowest tax rate in the world, so raising taxes isn’t much of an issue.  What you will not hear is that the tax cuts put in place by Bush (2003) are due to expire at the end of the fiscal year.  When all the “dust” settled, total savings enacted back then was around $350 million in cuts. So, what they are really proposing is a tax increase on a tax increase.

According to the US Department of Commerce, Bureau of Economic Analysis, savings rates have plummeted into negative territory.  Yes, the numbers there are staggering to digest, but I suppose the bottom line is that if you spend more than you make, you must dip into savings to cover the difference.  Do this enough times and you not only have no savings left, but you begin to run a deficit budget, or begin to borrow.  How long would it be possible to do this before lenders say no?

Excerpts from the Wikipedia entries for Keynesian economics and Socialist economics

Keynesian economics advocates a mixed economy—predominantly private sector, but with a large role of government and public sector—and served as the economic model during the latter part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s. The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. The former British Prime Minister Gordon Brown, President of the United States Barack Obama, and other world leaders have used Keynesian economics to justify government stimulus programs for their economies.^[2]

Non-revolutionary socialists took inspiration from the work of John Stuart Mill, and later Keynes and the Keynesians, who provided theoretical justification for (potentially very extensive) state involvement in an existing market economy. According to the Keynesians, if the business cycle could be solved by national ownership of key industries and state direction of their investment, class antagonism would be effectively tamed; a compact would be formed between labour and the capitalists. There would be no need for revolution; instead Keynes looked to the eventual “euthenasia of the rentier” sometime in the far future. Joan Robinson and Michael Kalecki employed Keynesian insights to form the basis of a critical post-Keynesian economics that at times went well beyond liberal reformism. Many original socialist economic ideas would also emerge out of the trade union movement (see Guild Socialism).

Is spending the answer to climb out of an economic hole? Is spending a way to stimulate an economy?  In my opinion, the answer is no to both questions. As a nation, we need to take back control and place some “common sense” into the programs we put forward.  Electing the proper people to reach these goals are paramount.

Cutting these huge expenditures needs to start with changing the WAY in which government functions.  Remove the greed and selfishness that dominates our current government and replace it with the self-interest that was a cornerstone of “Wealth of Nations.” When this is done, the people can take back control of government, something the founding fathers envisioned with the creation of the document known as The Constitution of the United States.

Reprinted from Investors.com

Policy Failure: Greece was told that if it wanted a bailout, it needed to consider privatizing its government health care system. So tell us again why the U.S. is following Europe’s welfare state model?

The requirement, part of a deal arranged by the IMF, the European Union and the European Central bank, is a tacit admission that national health care programs are unsustainable. Along with transportation and energy, the bailout group, according to the New York Times, wants the Greek government to remove “the state from the marketplace in crucial sectors.”

America continues to move forward to create nationalization in health-care, elections, student loans, automotive, banking and Public Service Unions.  When will America, or should I say the government, learn that nationalization is not the answer.  Private sector ownership in these areas give that prime motivation of profit.

Learning from the past, watching the former Soviet Union collapse, what was one of the main reasons for this collapse?  Lack of incentive.  Perhaps this may be a psychological aspect, none the less, real.

The following except is from Wikipedia, providing an understanding of nationalization.

“The motives for nationalization are political as well as economic. It is a central theme of certain brands of ‘state socialist‘ policy that the means of production, distribution and exchange, should be owned by the state on behalf of the people or working class to allow for rational allocation of output, consolidation of resources, and rational planning or control of the economy. Many socialists believe that public ownership enables people to exercise full democratic control over the means whereby they earn their living and provides an effective means of distributing output to benefit the public at large, and a means for providing public finance.

Nationalized industries, charged with operating in the public interest, may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs – for example, rural postal and transport services. As an instance, the United States Postal Service is guaranteed its nationalised status by the Constitution. The government has recognized these social obligations and, in some cases, provides subsidies for such non-commercial operations.

Since the nationalised industries are state owned, the government is responsible for meeting any debts incurred by these industries. The nationalized industries do not normally borrow from the domestic market other than for short-term borrowing. However, if profitable, the profit is often used as a means to finance other state services such as social programs and government research which can help lower the tax burden.

Nationalization may occur with or without compensation to the former owners. If it takes place without compensation it is a case of expropriation. Nationalization is distinguished from property redistribution in that the government retains control of nationalized property.”

We find ourselves in a large economic hole.  Should it be the will of the people  to own these industries that have found themselves in dire financial straits?  Based on that alone, why?  Nationalization of industry sectors is not the answer.

Community Guest Post

This is the amount of money spent by the Federal Government in Fiscal year 2009 on Education:  $142,979,796,091.  (source)

If you are brave enough to see what has passed through the Department of Education since 1962, you can view the COMPOSITION OF OUTLAYS FOR THE CONDUCT OF EDUCATION AND TRAINING: 1962–2011 by visiting WhiteHouse.Gov here.

I spent some time looking through the data and viewing this information in its historical context, it’s quite easy to see the compound increase in spending on education over the years. So, this got me to thinking…

With all the money wasted on public education, I am still amazed the Government can look us in the eye and advocate for an unending belief in increased spending on education, under the guise that we are so close to reaching an “intelligent society,” yet with the other breath, they continue to openly promote hand-holding “for our own good.”

What I wonder, is when did we, as a population, become completely unable to make decisions for ourselves? We have given up our ability to take responsibility for anything. This is not all the government’s fault.  We have let them do this. When we make the decision to take back both our rights and our responsibilities, will we be in a position to move the size and scope of government back to the position our founding father’s had envisioned.

The Liberal side in America tells us publicly they are for choice, yet privately, they move to remove all choice. They continue to advocate huge spending on education publicly, but privately the consensus among them is that we aren’t smart enough to run our own lives, so clearly they must step in. Simply stated:  As a nation of free people, we are intelligent enough to build a global super power, but we aren’t intelligent enough to make small, rational decisions regarding……well, pretty much anything.