It’s Deja Vu All Over Again

Guess who said the following: “We have tried spending money. We are spending more than we have ever spent before and it does not work.” Was it Sarah Palin? Rush Limbaugh? Karl Rove?

Not even close. It was Henry Morgenthau, Secretary of the Treasury under Franklin D. Roosevelt and one of FDR’s closest advisers. He added, “after eight years of this Administration we have just as much unemployment as when we started. . . And an enormous debt to boot!”

Read the rest of ‘Guess Who?’ by Thomas Sowell

It was Yogi Berra who said It’s Deja Vu All Over Again. It was Edmund Burke (1729-1797) who said ‘Those who don’t know history are destined to repeat it.’ It’s been 80 years since The Great Depression. Apparently our leaders in Washington have not studied American history.

2 thoughts on “It’s Deja Vu All Over Again”

  1. No, jacking up taxes is not the answer to paying it down. In fact, it took a world war to spawn the economic growth that ultimately got us out of the great depression. Economic growth at the fastest rate possible, or economic growth period, is the way to pay it down. We have to grow our way out of debt. Electing politicians and allowing them to spend more than we take in will not pay down the debt. A favorite quote of mine on taxing and spending comes from Winston Churchill. “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

    Let’s agree that at some point in our 250 years history, that we had a set of rules and measures that we all survived on, and peg it there. The attitude since the Johnson administration, I call it liberalism, he called it ‘The Great Society,’ has been to provide for and to do more for people, excusing them of personal responsibility, breaking up the family, and creating more people dependent on government to the point of where we are today. Broke, demoralized, and fired up on wealth envy and class warfare.

    So pick a year, any year. How about 1990, or 1995, or 2000? And dedicate government resources to the levels that existed then, and that’s the limit. As the economy grows, the spending can grow by 1 or 2 percent of the GDP. Not 20, 50, or 200 percent. Period. Then, as the economy continues to grow, we will grow our way out of debt. I heard an estimate today that it would be done in less than 10 to 15 years if we would only do that.

    First thing is to decide to do it. Debt is created by spending, not a lack of taxing. So stop deficit spending. And, stop creating ever-expanding and never-ending entitlement programs. Have government back off and let failing business fail. No more bailouts. The market will pick up the pieces and correct itself, in a macro sense. I can’t think of one example where a government ‘fix’ didn’t make matters worse.

    Understand the economic reality that raising taxes is a negative incentive to investment and production that result in lower revenues. Conversely, lowering taxes is a positive incentive and in a dynamic (read free) environment, will increase revenue. That is exactly what happened when JFK did it, Reagan did it, and Bush 43 did it. The subsequent deficits that followed were caused by congress increasing spending to amounts MORE than the revenue taken in. Tax cuts didn’t create spending. The tax cuts generated revenue.

    While on the subject of ‘tax cuts,’ the notion put forth by the political class that they represent ‘costs’ that ‘have to be paid for’ or ‘made up’ in some way really pisses me off. Tax cuts are not costs. Period. Very simply, they are not costs because it’s not the government’s money. It’s our money. Tax cuts are incentives to economic activity. i.e. If you have more money in your pocket due to a reduction in taxes, you will spend some of it or maybe invest in your business. If you have less money in your pocket due to a tax increase, you may not even have the option to spend what you have remaining. You may need what’s left just to put food on the table or to keep your home from being foreclosed. You won’t be expanding your business or hiring people.

    If you want to talk ‘costs,’ expanding government in any way, shape, or form does nothing but increase cost or overhead. If you’ve ever run a business, you know what overhead is.

    Understand that reducing the debt is not to be solved by raising taxes enough to pay for current and future obligations. The frame of mind has to be in spending less, not trying to figure out how you can suck more money out of the private sector to pay for new government programs. Doing that is like economic bloodletting. The desire to not raise taxes is not to protect the filthy rich. It is to enable economic activity. Jobs are created in the private sector. Taxes remove capital from the private sector. And poor people don’t create jobs or hire anybody. Raising taxes is a formula for depressing economic activity, not stimulating it.

    Government jobs do nothing but add to the overhead. Since it is the taxpayers that pay for those government jobs, bureaucracies, agencies, buildings and related infrastructure, expanding government is antithetical to economic stimulation.

    Recognize that at this point, ‘reform’ means taking away. Repeal Obamacare, repeal Bush’s part D prescription drug program. You have to put a lid on spending. Programs like these have no lid. And taking things away require courage and leadership. I think as Americans, we still can do it without rioting in the streets like they’re doing (mostly union inspired) in Greece and France. The Europeans have been sucking on the government teet for so long that the thought of a measly 40 hour work week for them now is like cutting off an arm.

    Social Security has to be re-designed to handle future generations. Without doing that, it’ll be broke in a decade or two. Or rather, just on the Social Security entitlement alone, the country will be broke. Nevermind the consequences of Obamacare and the prescription drug program.

    Reform health insurance by making insurance companies compete with each other in all 50 states. That opens the market to real competition. Remove the government mandates of what kind of coverage a company can offer. Government mandates only add to the cost of the premium. In this respect, the market and the consumer will be the decider of the best service at the best price. Not some socialist in Washington. Obamacare is unfair competition, by design, which is meant to undercut the private sector insurance companies so they can’t compete without raising premiums to where people or their employers can’t afford it, forcing them to the only place they can go, to the so-called government option, and forcing the insurance companies out of business. Then there is the creation of better health care delivery systems, as proposed by Farid Khavari, that would reduce the cost of health care even further.

    Then there’s the economic boost that the FairTax would provide. For all people regardless of their economic standing. Then there’s the concept of state owned banks like that proposed by Farid Khavari and being done in North Dakota for the last hundred years.

    There’s more but I’m tired. I’ve already burnt up the extra hour of sleep I was going to get from the time change. Maybe next year.

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