I think this bill is an absolute invasion of our privacy and a danger to our liberty.  This basically steps in on state territory and requires states to redo their system of driver’s licenses in a way to give federal authorities a biometric search database of every American…  This is a tragedy, it is dangerous for government to track every human in the nation and no real system good can come from it.  Historically national programs such as this simply give a means to perpetrate great wrongs against liberty and freedom and we should fight this program!  The bill went through in 2005 but states have stonewalled it now the Obama administration is trying to revive it and amend it to make sure the states comply.  Contact your congressmen and tell them to repeal in total the Real ID act and not to support any version or similar bill.  The real ID act opens a dangerous capability for the federal government that it doesn’t need and can’t use for any real wide spread beneficial purpose.  The risk of abuse of such a database is way higher than any potential benefit it could offer.  This would allow them to run a photo from a rally and ID each person via computer database biometric search and record and keep track of movements, behavior and many other aspects of privet life without our knowledge.  The government has done these things in the past and we can’t fool ourselves into thinking they won’t again.  Given the stance of the current administration given some of the definitions and warnings from the department of homeland security this system would make it a cakewalk to monitor movements like the T.E.A. party movement or the Minute man Project and other legal and just movements which have already been marked by some in this administration as “potential terrorist”.

I'm not a fear monger I simply asking that we realize the real possible risks here and compare them to any possible benefit.  
 
I really believe that the Austrian Economists have a lot of things right though maybe not everything... there is a lot to learn by listening to them.  I stumbled on this link to a confrence... its a few years old but you should have a listen if you get time some of them are interesting!


http://mises.org/media.aspxID=73&action=categoryweeblylink_new_window
 
So I talk a lot about how bad Keynes is and I talk a lot about how I disagree with the pseudo economics that has in large part run our government policy over the past century.  I want to explain briefly why these standing theories are so dangerous and why they are wrong.  Keynes spoke the mathematical economic speak and was thus accepted by the field.  Furthermore, he is a godsend to politicians whose rational person interest is to add to their power and the power of their branch.  This way of thinking, that government can manipulate and steady the economy through mathematical calculations and artificially set interest rates and money circulations allows government to vastly expand their role and power in this country making their positions of more value and thereby giving them an interest to follow this methodology. 

So what’s wrong with the ideology that government can act as a stabilizer in the economy?  Well basically the premises are wrong.  The first premise is the assumption that the interest rate that the market gives us isn’t the optimal interest rate.  I have found no proof that the market interest rate is faulty.  Secondly, they presume that they are capable of finding a better interest rate for the economy assuming already that one can be found.  This is not only unproven but beyond unlikely and against history since government central planning has never added to the overall wealth of an economy in the long run.  Lastly, the most important premise is that there is no adverse effect to this government control that outweighs the assumed benefits assuming the process is possible which of course I think it is not but giving them the benefit of the doubt if they are 100% correct they must still account for negative effects.  So what are the negative effects?

This will be my focus because the first two are relatively self explanatory to anyone with knowledge of history and economics unless of course you are already drinking the Keynes Kool-Aid in which case this argument is far more likely to capture you attention than the first two.  The largest adverse effect that I see in this big government scheme is found in the theories of time preference.  Interest rates are based on time preference.  Now time preference on an aggregate level is in a relationship with aggregate demand.  Future demand and present demand are linked through time preferences of consumers and that is a major component of market based interest rates.  So what does this mean for the economy?  In the economy people earn income and then from this income some they will spend in the present or short term but people attempt to level out their standard of living and plan for large purchases to allow for a similar long run standard of living and the purchase of large products like retirement and college for children and thus they save a portion of their income for future consumption during hard times and for large purchases.  This savings is determined by their time preference for consumption and represents a time function on aggregate demand because savings is essentially pent up demand.  That level of pent up demand is to some extent effected by interest rates and to some extent it helps determine the interest rate as the market rates move towards equilibrium.  Now the other side of this market is the demand for these savings.  There is demand for savings because savings are borrowed by industry to build capitol (and by other consumers but since we are talking in aggregates we will ignore that portion).  Borrowing for capitol increases is also a time issue because capital investments relates directly to future supply availability.  So, time preference for consumption determines savings rates and then savings rates determine capital expenditures which determine future supply right?  So then there is a link between aggregate supply in the future and aggregate demand in the future created through the process of reaching equilibrium interest rates, right? 

Wow, that means that without the process of setting equilibrium interest rates we will have the wrong amount of savings and businesses will invest the wrong amount in future production capabilities and therefore aggregate demand and supply won’t match up right in the future right?  SO what does that mean?  Well it will either be a shortage or a surplus of supply and since labor is the short run fix for inequality it means we should sweep from vast unemployment and depression to booms with very high unnatural employment.  While this is great for political gamesmanship it is bad for us the common people and if only everyone could understand how this worked we would run these Keynesian economic politicians out of Washington on the rail and demand a standardized money supply and a market controlled interest rate structure!
 
So can anyone out there tell me please how it can be said that borrowing money to buy and destroy privet capitol is good for the economy?  Thats what the government is doing... why don't we just buy forclosed houses from banks and burn them down to help the housing market?  Same principle... or buy up companies and close them... this is idiotic!!  It hurts us in every possible way.  It reduces total capitol, decreases net national savings by putting the government in more debt, hurts poor buy increases prices on used cars, hurts tax payors that have to pay for this, the only people who benefit are the individuals that buy new cars and the car companies... mostly foreign car companies... lunacy is it not?  Please someone explain this to me if you can I am dieing to understand it...
 
The 5 year survival rate for stage 1 prostate cancer is almost 100% in the US.  It is lower around 99% in Canada and about 77% in the UK.  The UK has had universal healthcare since WWII and the UK health program is the 3rd largest employer in the world behind only the Red Chinese Army and the Indian Railroad.  Healthcare is the top ticket item on the UK budget.  The price is high and the care is not equivalent.  Why would we want to mimic programs that nowhere are capable of equivalent care?  There are many methods that would drive down healthcare and the greatest perhaps is deregulation not more regulation.  Right now a significant portion of the problems with coverage is a negative tax structure and heavy and differing regulation.  Standardization and less regulation or simpler regulation would benefit the system.  Furthermore, Medicaid and Medicare are a drag on the healthcare system as it is.  With this infinite third party payer the demand by this segment of the population is huge especially relative to projections and the payout while massive on the taxpayer is often times barely above cost and below costs in some places.  The increased demand created by government involvement mixed with downward price pressure hurts the market scaring off new supply in the form of new investment and doctors and increases demand in the form of unnecessary healthcare.  This problem will be infinitely increased and the problem worsened by this type of government involvement.  
 
 
Throughout history the single greatest problem with democracy has always been personal responsibility and morality.   Without personal responsibility and morality the masses will eventually realize the power they hold to benefit themselves at the cost of others.   Democracy, especially representative democracy, slips easily into cleptocracy.  It sits on a precipice with a slippery slope on one side.  Tyranny of the majority is a term associated with democracy in the past, with just cause.  Another great once said that democracy lasts only until the masses realize they can vote themselves largess from the public treasury; is this not true?  

                The United States experiment with democracy has lasted as long as it has because it was built around a culture, civilization and religion that supported individual rights, individual property, individual responsibility and individual morality.  This cultural norm set standards not codified in the law but adhered to by the masses and the elites alike.  The independence and self reliance allowed for government of the people and by the people to run relatively uncorrupted by privet interests. What happens if the majority of constituents loses the fundamental principles and instead develops an entitlement mindset?  When the many feel that the responsibility that their parents and grandparents welcomed as part of freedom is now the realm of government then we see the growth of government and codification and a decrease in personal morality and responsibility.   Democracy was not meant to function in such a world of excess and blame.  Democracy requires self government to function properly and cannot long survive when the people refuse to bind themselves to a moral code and solid work ethic.  

                Business, politics, religion these are things which cannot be viewed in a bubble.  Economics is not simply the study of how people make business transactions but in essence how they live their lives.  You cannot subscribe to beliefs of freedom and simultaneously acquiesce your risks and responsibility away to another.  You cannot enslave yourself for the comfort of living without responsibility and then not work and serve that master without freedom.  Physics will not be mocked and every action will have its reaction.   If you can separate your life and rationalize your behavior then you will never have to accept any responsibility.  If each aspect of life is its own sphere then there can be no black and white, no absolutes.  When man is free to do as he wishes without constraint; when morality is not binding and there is no higher standard then there is not code of laws and no enforcement agency that can maintain the rights of all.  Man naturally infringes on the rights of others unless he reveres their rights as essential for his own.  Respect for the rights of all as intertwined with your own is the glue of democracy that allows it to solidify and maintain itself as a viable government.  When men become complacent and no longer respect the value of their own rights and are willing to give them away for comfort or safety and when men fail to realize that their rights are only as sure as the rights of the weakest citizen in their society then they have lost the necessary knowledge and understand for democracy and it will not long survive.  Democracy is a delicate phenomenon and cannot endure the loss of structure which comes from an understanding of the fundamental principles and premises which allow it to operate.  To erode individual responsibility and morality is to undercut the very pillars on which our way of life stands.  To separate morality and religion; to separate our higher laws from our secular lives is to destroy a foundation of responsibility and control which cannot be synthesized and cannot be duplicated.  A free society cannot stand when its citizens do not understand the duties of free men.
 
According to a report I saw today if we increased to a 100% tax on the wealthy we couldn't cut through next year’s deficit.  We would have to tax at 100% everyone in the middleclass and above to cover the budget shortfall coming next year due to the new administrations spending projections.  This is ridiculous.  We can't sustain under the weight of spending that level of GDP.  That report suggested that everyone making $75k or above in annual income would have to pay in every cent to meet this new level of spending... this is outrageous.  We are passing along a debt to future generations which is criminal. 

 
The Cash for Clunkers Program struck me as very familiar when I first heard about it.  After a brief consideration I realized why it was so familiar and that reason was because I had heard a similar scenario in economics class a while back.  What was this similar scenario?  Well for those of you familiar with the “broken window fallacy” you may be keeping up with me by now but for those of you not familiar let me briefly hit the high points.

In essence the broken window theory states that assuming a very Keynesian type idea that it is possible to help the economy by forcing consumption of goods to artificially raise demand.  The idea continues the ideology very popular in government and takes it to a logical end.  The logical end is that since breaking a window creates jobs at the element level, the manufacture level and the installation level that a broken window is a benefit to the economy.  We go on to say that it would be a “good” idea to break all of the windows in a town during a downturn because demand would be stimulated and jobs created and therefore the economy would be strengthened.  Obviously, waste is never beneficial no matter how many jobs it might create.

So how does this remind me of the Broken Window Fallacy?  Let us walk through it.  The government is purchasing “clunkers” which are older but working vehicles and scrapping them.  The program destroys the vehicles and ensures that they are not used.  This is identical to the broken window theory.  Capitol is being destroyed and the tax payer is paying to replace the existing capitol.  How is it possible that the destruction of capitol can increase demand and therefore drive supply to strengthen the economy?  It can’t! The Theory of Economic Growth indicates that since economic growth is invariably tied to capital accumulation in fact these programs hurt the long run economic growth in the system.   I say that because due to the marginal propensity to save and the marginal propensity to consume only a portion of the “new” income created will result in savings and thus capital accumulation therefore paying  to destroy and replace existing capitol leads to a weaker capitol stock position after the dust settles leading to a slower long term economic growth picture then before such a program so why would the administration do it? 

I don’t know but if I had to speculate I would say that the auto industry and the support industries such as the steel industry and mining industry are union heavy industry and since the current congress and administration are democrats and are well to support union interest in exchange for union support my speculation is that this is a major encouragement to overlook the obvious bad economics.

6/10 of the top selling cars under this program are foreign made cars… that’s a huge leakage for a program of this sort not to mention the leakage from foreign components to domestic cars!  This is ludicrous waste and must be stopped.  This is simply unsustainable waste.

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    Ludwig von Mises: 'Used to the conditions of a capitalistic environment, the average American takes it for granted that every year business makes something new and better accessible to him. Looking backward upon the years of his own life, he realizes that many implements that were totally unknown in the days of his youth and many others which at that time could be enjoyed only by a small minority are now standard equipment of almost every household. He is fully confident that this trend will prevail also in the future. He simply calls it the American way of life and does not give serious thought to the question of what made this continuous improvement in the supply of material goods possible.' - Economic Freedom and Interventionism
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