Economic Socialism

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.