Barack Has Fixed The Economy!

According to the AP, the jobless rate has dropped from its high 10.2 percent in October to an astoundingly low 10 percent in November!!!  Everybody break out the champagne!  The crisis is over!

The first line of the article states "Two years of steep job cuts all but ended last month, unexpectedly pulling down the unemployment rate and raising hopes for a lasting economic recovery."

It then goes on to say that the unemployment rate "unexpectedly" dropped by 0.2 percent, and the "real" jobless rate dropped 0.3 percent, moving from 17.5 percent to 17.2 percent  It also referred to the numbers as "better than expected."

Frankly, any good news on the jobs front is "better than expected," but to assume that this is a portend of the end of the current economic crisis laughable.  The government has done little more than spread some money around - so what will happen when the money dries up?  Nothing has been done that will lasting effects on the economy, but the media is so desperate for good economic news that an insignificant shift in the unemployment rate is reported as great news.

Rubbish.

The Dubai Bubble

If I've ever seen a predictor of where overspending will lead, it's in Dubai.  The UAE, basking in the wealth they gained from oil sales, spent and spent and spend, even going so far as to build a tower to the heavens (the Burj Dubai) and a man-made island.

This is the danger that America faces: we cannot afford the arrogance to think that we can spend as much as we want with no consequences.

Happy Tax Day!

It's tax day...the day that commemorates the government's bad spending habits and exploitation of the people for their own ends.

This year, millions of Americans are getting money back due to the so-called "economic stimulus package," a lame bi-partisan attempt by our federal lawmakers to bribe the American public and help the economy.

The notable thing about the economic stimulus package is that the Democrats have as much as admitted that money in the hands of the people really does stimulate the economy...a concept that they never can seem to understand any other time they talk about taxes. Of course, for the Democrats, the economic stimulus package was an opportunity to use the IRS as yet another welfare system, offering "tax rebates" to people who don't make enough money to have to pay income taxes.

But if money in the hands of average Americans stimulates the economy, and the Democrats have admitted it with this tax rebate, why haven't the Republicans pointed out the fact that maybe the Bush tax cuts really have been a good idea, and electing Clinton or Obama, who will do nothing but raise taxes and spending, would be a disaster for the US economy?

If a tax rebate will help to stimulate the economy, then lower taxes across the board, accompanied by lower government spending, will help to stabilize our economy and guarantee that the US can retain its superpower status over the long-term. The only thing the Democrats' socialist policies will get us is a quick trip into the dustbin of history...but for some reason, none of our politicians will admit as much, because they're too busy trying to bribe the public.

We're Going The Wrong Way

The US economy is in trouble...more trouble than most people are aware. The problem is that our government, in trying to fix the problem, is actually taking steps to make things worse.

Treasury Set to Announce Regulatory Overhaul

Fed Eyes Nordic-Style Nationalisation of US Banks

Paulson Plan Endorses Fed's Enhanced Market Authority

Brace for $1 Trillion Writedown of 'Yertle the Turtle' Debt

Not long after our nation's founding, the country was plunged into a debate over whether the federal government had the authority to create its own bank. The truth is that the federal government has no authority to mess with the banking industry, including the creation of a national bank - yet the bank was created. Nowhere in the Constitution is the federal government given the right to nationalize any private industry, but now there are rumblings of a nationalized banking industry. How can this be good news for the US economy?

For a long time now, the US government has garnered a well-deserved reputation as being an inefficient, slow-moving behemoth that just cannot seem to do anything right. Remember Hurricane Katrina? Is that the kind of leadership you want running our banks?

Yet that's just the kind of banking system our leaders are talking about.

The Constitution does not give our government the authority to nationalize our banks. The government has done nothing to help thus far. They've made some cosmetic changes, to be sure, but nothing that will fix the long-term disaster that looms over our economy.

Personally, I think it's time for the people of America to look to our founding documents. Read the Constitution, and realize that the government is exceeding its authority.

How about this line from the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Nationalizing the US banking industry is yet another cosmetic change that, in the end, will only make things worse...and the more our federal government exceeds its authority, the more I tend to think of the original founding document of the United States: the Declaration of Independence. I think of how, as our federal government becomes larger and larger, taking more and more power away from the people, they "[become] destructive of these ends." It's time for the people of America to wake up. It's time to invoke the "alter or abolish" clause of the Declaration of Independence. It's time to put the politicians back in their place and start running a government that realizes that its authority and power comes from the people, and the people can take that power away.

Maybe it's time for another American Revolution.

Is it the economy...or is it something else?

The US stock market has recently been going through some major ups and downs, and the effects have been felt worldwide. Today, the panic subsided somewhat when the Fed lowered interest rates, but given the fast upward trend the stock market has been on lately, I wonder just what the problem is.

Many and more have said that the recent downturn was due to the inevitable troubles in the housing/mortgage market - a combination of unscrupulous lenders and inattentive borrowers created quite a tenuous situation, with far too many people getting into adjustable rate mortgages (ARM), basically gambling against a future rise in interest rates. Well, interest rates rose, and almost instantaneously, the housing market was in trouble. Loans were defaulted, houses were reposessed, lives were damaged.

The general assumption is that this is a sign that the "Bush economy" isn't all it's cracked up to be - and with a leftist media, it isn't cracked up to be very much, that's for sure. The truth is, the Bush economy has been doing well - the problem that shook the stock market this week runs much deeper, and has been around much longer than George W. Bush has been president.

The problem with the US economy is that fiscal conservatism is dying in much of America - too many people are buying on credit, without the capital to pay off their bills. Anyone with a nose for history knows that this kind of trend was the instigator of the Great Depression...and thankfully, we seem to have avoided another such depression this week. However, if America does not change its spending habits, I fear that another depression will come, and sooner than anyone things.

Problem 1: Like too many of our citizens, our federal government has been spending on credit for far too long...and it has been spun as a national security strategy (see my previous post).

Problem 2: Too many people buying on credit means too few people with real capital, should the US actually enter an economic crisis. Our nation has become too lax: for some time our economy has been shifting from industry to services, and now we have more credit than capital...these are the harbingers of disaster, especially when the wolves of Communism (Cuba, China, Venezuela, and dare I say Russia) and Islamic Fascism (oil, anyone?) are circling. Whether Europe likes it or not, the United States stands virtually alone as the guardians of freedom and justice on the planet, and as it stands today, we are outnumbered, outgunned, and worst of all, we stand divided against ourselves.

The simple truth is that buying on credit is nice and convenient, but too much buying on credit will bring ruin to America. If China were to call our loans, or if one of our major oil suppliers were to stop supplying us with oil, the potential for an economic collapse is immense. Life in America is good, but we cannot afford to be big spenders. A storm is coming, and our money would be much better spend preparing - digging trenches and setting stakes - because the enemy is coming, it's just a matter of time.

World Markets in Bad Shape

It seems like only last week that reports were all over the news about how great the stock market was doing. Going up and up and up, breaking records...and now that is all over, for now. The Dow has dropped nearly 400 points, the Asian markets have begun a downward turn, and Europe is now trying to head off a potential financial catastrophe.

These market problems are extremely complex, but there are two primary reasons for this downturn: the US housing market, and China.

The US housing market is, if anything, a temporary speed bump to the world's economies. The problem: the real estate market was too sweet. They call it "a buyer's market." Good for buyers, also good for unscrupulous realtors and bankers. Bad for the ignorant.

Those that weren't taken in by shady dealings were betting against the market, getting into adjustable-rate mortgages and home loans, then crossing their fingers, hoping that interest rates wouldn't rise. When interest rates rose, thousands defaulted on their loans. Bad for America's real-estate industry, and bad for the markets.

The other problem is China. China has been in the midst of a military build-up for years. Recently, they've been posturing, making economic threats against the US. The problem: if China decides to act on those threats, the US could be in real economic trouble.

Years ago, the United States adopted a policy that is basically a form of Cold-War era Mutually Assured Destruction, or MAD. We already have a sort of MAD policy going with China, in the more traditional, nuclear holocaust sense, but this new MAD policy has nothing to do with millions dying from nuclear weapons and radiation fallout: it's economic MAD. The theory is, we tie our economy into China's economy until we're so tangled up that if they take us out, they're ruined economically. The problem: it's a global economy, and the scales are tipping in China's favor, to the point that they now wield a cannon, while the US is holding a BB gun. China owns much of the United States' debt. If they were to call in those loans, the US would be in a world of hurt. It would cause major, possibly irreparable damage to the US economy. This kind of economic attack would doubtless hurt China, because our economies are tied so closely together, but China is dependant on US consumers...and losing the US market would be a blow, but one they could eventually recover from by branching out to other markets. The US has become so dependant on cheap goods imported from China that an "economic war" with China could cripple the US economy for innumerable years, until the United States was able to turn back the clock, becoming a primary producer of goods once again.

I'm not very old. I remember being in junior high school and hearing about the debate over granting China Most Favored Nation (MFN) status in order to stimulate trade, and thinking about how bad of an idea that would be. Well, we've been trading with China, they were granted MFN status, and the time to reap what we have sown, it seems, has come sooner than we thought.

The moral of the story: never trust a Communist nation. You'd think that after Russia, the Cold War, the Korean War, Vietnam, the Cuban Missile Crisis, Kim Jong Ill & North Korea, the incident with China shooting down a US military plane, and Venezuela's Hugo Chavez, we'd learn not to trust Communists...unfortunately, the State Department is slow to learn.