Posted by
Andrews on Thursday, October 09, 2008 11:08:36 PM
I see that the Democrats are proposing a new spending bill to "put America back to work". Don't they realize that every dollar they spend has to come out of the economy where it was putting other people to work? And in needs more urgently felt than the government makework (sorry, "urgently needed infrastructure") they are proposing?
This is the same sort of stupidity that Hoover tried and FDR expanded to turn a recession into a ten year Great Depression, felt longer in the US than the rest of the world, by many years. So why on earth would we try this yet again?
The solution is simple. Forget the bailout, forget the work schemes. Accept the economic slowdown and the slight recession we will experience. Do not fiddle with interest rates or conduct the inflationary open market operations that would entail.
What will happen?
Well, for a time, the markets will be sluggish, the economy will grow slowly. But over time, people will adjust to slightly tighter credit. Let us face facts, even after the "crisis" was upon us, credit was still more lenient than in 1988. We still have very lax credit policies. So, if we have to adjust, it will mean nothing more than reverting tot he lives we lived in the eighties, not a horrible fate.
Yes, doing nothing will hurt for a while, but only a little. Any effort to postpone facing these consequences will either just prolong them, or at best, will put them off for a year or two, when they will be even worse.
There is no way to completely avoid the consequences of bad ideas, eventually you must face the music, and mistakes will have to be paid off. Why do we insist that if we put them off, then it is as if they don't exist? It only means they will come back later, and be much worse then.
Let us grow up, learn to pay our way as we go. face the consequences now, get past it, and start fresh.
Why is that the one option no one is willing to consider?
POSTSCRIPT
To all those I promised essays tonight, my apologies. I did post a few short pieces, but did not have time to write the big works I had hoped. I will try my best to get them up tomorrow.