Sunday, February 15, 2009

How not to fix a problem.

There is no doubt that America is in a financial crisis. Even as conservatives, we must agree that our economy is in a slump. This is not the second coming of the Great Depression however, as many liberal doomsayers will have us believe. I would even hasten to call it a strong recession.

What we are seeing is a wane in the typical cycle of free market laissez-faire economics. This is the part where the weak fail and the strong prosper and the market clears up for new innovation and development.

We got to this point due to failed policies, some developed by corporations and others developed by do-gooder politicians, which had people borrowing money they didn’t have to get things they didn’t need. What should be happening now is that the companies that engaged in these practices should be punished economically for allowing poor loans and investments to happen. The people that asked for these loans and developed the poor investments should also be held responsible, including being financially responsible for their debt. If this means people lose the house they mortgaged that was out of their price range and are forced to live within their means, so be it.

The government has taken it upon themselves to help all of these people however. They are offering money to the institutions whose poor practices caused them to suffer, and giving out free passes to the individuals at the expense of tax payers who were responsible with their money and investments.

This is a dangerous step we are taking that destroys the basic tenet of capitalism and leads us ever closer to socialism. To quote the economist F.A. Hayek, “"The coming of socialism was to be the leap from the realm of necessity to the realm of freedom (Road to Serfdom, p. 25)."

To sum up the stupidity of the government’s plan in one statement; our government has decided the best way to fix the problem of individuals and institutions borrowing money they didn’t have to spend on things they don’t need, is for the government to borrow money they don’t have to fix institutions and individuals’ problems. Perhaps it has come time to let our government fail under the capitalistic system?

1 comment:

  1. Our government has not had a true capitalist system in decades. But I agree that it is time to let the economy correct itself without government intervention. It might take some few years for the corrections. But the country will be stronger for it. The marginal producers will go under and the strong will come out of it smarter and stronger.