The Economy - Hard On Us All

January 24, 2015

 

You don’t have to look very hard these days to find the conventional wisdom that we are a divided country. I have heard many of my fellow citizens of the moderate and left persuasion bemoan the extremism which sharply divides our nation and ossifies any chance for change or innovation.


I think these sharp and often vitriolic divisions are based on deep seated perceptions or view of the role of Government in our society. We need only look to the delusional “Originalist” who think our Constitution was written in stone and frozen in time when ratified in 1789. If such a point of view were accurate about our Constitution, it begs the obvious question. What are all those pesky things called the Bill of Rights and the remaining Amendments? “Originalist” have a point of view, it just does not follow any of the accepted understanding of the Constitution, the or laws of the rest of the nation, or the founding fathers themselves.


Lunatic fringe examples aside, while everybody may be entitled to an opinion, the real question is whether or not the position or opinion is supported by the accurate historical record and objective evidence. To do otherwise is folly.


Which brings me to our current dilemma on the economy. One side of Congress believes that Government spending should be used to jump start the economy. The other side believes that corporations with their drive for profit will jump start the economy if given freedom from regulations and a zero tax rate.


The first prevalent position is built on Keynesian economic theory which has been proven time and again in both theory and practice. It says that government, which prints and distributes the money and most of the monetary policy of the nation, should invest directly to the people. Any deficits created will be paid back with from future taxes of a robust and growing economy. This approach worked in 1932, 1960, 1975, and 1993. Each time our economy not only recovered but began an expansion of innovation which was larger than the last recovery.


The second position theorizes tax cuts and deregulation of business will magically prompt private business to hire more workers and jump start the economy. This theory was shown to be a complete failure in 1909 – the silver crisis, 1928 – the Great Depression, 1982 – the Reagan Recession, 1988 – the Bush I Recession, and 2002 – the Bush II Recession. Yet, once again some members of Congress want to try this failed approach by spouting the same old tired rhetoric of “no new taxes” and espousing the repeal of regulations long shown to protect the public safety, health and welfare.


A man can believe whatever he likes, it’s a free country. But just how many times do the facts and objective evidence show an error in judgement before you become a fool?

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