Sunday, January 16, 2011

Government Intervention In The Economy

Government intervention in the economy is always the problem and rarely the solution, often causing boom and bust cycles. It was the federal government that decided that everyone should be a homeowner, even those who could not afford to make payments. As such, mortgage companies were "persuaded" by Socialists during the Clinton Administration, under threat of even more regulation, to make loans to people who could not qualify for loans under normal credit standards. People like Socialist Congressman Barney Frank and Senator Chuckie Schumer screamed that mortgage companies were discriminating against their PEEP's because they could not get home loans. Of course, their PEEP's often could not get home loans because they did not have the means to repay them.

And, then corrupt Fannie Mae and Freddie Mac got into the act with huge campaign contributions that mostly went to Socialists, including Barack Obama. The cheap money flowed as the mortgage backed security was born to fund these sub prime mortgages. We all know the end of this story as we now have millions of homes in foreclosure and a real estate market in many states in chaos.

And, then of course, there are all the bail outs, which is just another form of government intervention. General Motors and Chrysler, in particular, should have been allowed to go bankrupt and file for reorganization. The odds are pretty good that Chrysler, which was bailed out once before, would have disappeared to get rid of the excess capacity in the auto industry. GM would have come out of bankruptcy leaner and better able to compete. Instead, what is now Government Motors emerged and it still owes the American taxpayer more than $50 Billion that we will never see again. And, GM has been forced to produced the Chevy Volt, their electric car that sells for more than $40,000 and is subsidized by the government to the tune of $7,500 per car. Obviously, if the car must be subsidized, there is no market for it because the technology still does not compete with gasoline powered cars.

And, don't get me started on Ethanol, wind and solar power none of which are economically feasible today. The federal government is spending billions of dollars to subsidize these technologies rather than allow the development of nuclear, clean coal, natural gas and oil in the United States that would make our country energy independent in the next ten years.

Government generally does not have a good track record whenever it intervenes in the economy. If anything government intervention distorts markets and rewards losers. Free market capitalism, in all its brutality at times, is the only way to ensure innovation, economic growth and job creation. Socialists at all levels of government just do not get this. Yes, government has a role to play related to our national defense and certain infrastructure development; but otherwise, government should mind it's own damn business and allow the free market to prevail for better or worse.

Since Socialists do not understand Economics 101, we must elect Conservatives in 2012 and 2014 that support free market capitalism, limited government, lower taxes and less regulation, a balanced budget, term limits, real education, energy and health care reform, a strong national defense, including securing our border and fighting Terrorism, the right to bear arms, the sanctity of life and family values that are the foundation of our nation. This is the platform supported by the majority of the American people and the only way to restore economic growth and job creation in our country.

Most important, we must sweep these misguided Socialists out of office by electing Conservatives in 2012 and 2014 who will adhere to the Constitution, as written by our Founding Fathers, not as contrived by the left wing media, Socialists in the last 98 years, our current, or former Presidents, Congresses, or the Courts. We can do it. We must do it to preserve our freedom, our nation and way of life for the sake of our children and grandchildren.

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