the whitestick papers

looking at politics from a different perspective

First, stop digging

leave a comment »

We are now in the second year of one of the worst recessions in American history.  There’s been a lot of talk about what can and should be done to deal with it but, as has been noted, those who don’t learn from history are doomed to repeat it, and there is much that has been done already that speaks to what needs to be done in the future.  Among the most ominous aspects of this continuing downturn is that what the government’s doing is almost identical to what turned the relatively minor recession of 1929 into the Great Depression of the 1930’s.

First, let’s go back to early 2008.  Although the economy was starting to slow, what triggered the sharp decline was poor risk assessment, particularly in the housing industry.  During the Clinton Administration, laws forced lenders to make loans to people who didn’t deserve them.   After twelve years and with a weakening economy, those bad loans started cascading into failure and, as the 2001 stumbling showed, once that starts, it affects other parts of the economy as well.

It was bad enough but, because only a relatively small percentage of those with the loans were actually affect, we could have weathered it.  But then,the media deepened it by hyping it; after the surge worked, the press no longer could beat President Bush over the head with daily bad news from Iraq and had to find a new hammer. The normal ebb and flow of economic cycles augmented by the inevitable result of “liar loans” with images of foreclosed houses, made the downward turn sharper and deeper as people lost confidence.

The cure is going to take time and more than a little pain. The devolution of American liberty into nascent tyranny has happened in fits and starts, but it has taken nearly all of our history to get us where we are today. Clearly, the Keynesian policies and practices that is the typical government response do not and cannot work; it’s a wide and well-paved road that’s easier to travel but eventually leads to disaster. Eventually we, as a nation, have to be willing to give up the “gifts” and “support” given us by government – unemployment insurance, Social Security, Medicare, tax “deductions” and “credits” as well as the more obvious “welfare” and other assistance programs – before we can truly be a free people again.

In the meantime, I’ll settle for it not getting worse; stop automatic increases and extensions, and create no new programs. Then, one by one, we can evaluate every existing program in light of Constitutional authority. To be honest, I don’t think the nation would stomach that – we’ve gotten too comfortable with our bread and circuses – but it’s where we’ll have to go to completely correct the situation.

There’s an adage that says, “When you realize you’re in a hole, the first step to getting out is to stop digging.” I don’t expect to see complete economic recovery in my lifetime. But I’ll vote for anyone who’ll stop digging the hole – and vote against anyone who digs it deeper, no matter what “good” it’s supposed to do.

Advertisements

Written by Jeffrey S. Smith

11 March 2010 at 11:36 am

Posted in Basics

Tagged with , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: