Monday, January 26, 2009

Peter Schiff Speaks Once Again About The Problem With Bailouts



From wikipedia:
Schiff has said on numerous occasions that the current economic crisis is not the problem; it is the solution. According to him, the transition from borrowing and spending to saving and producing cannot be accomplished without a severe recession, given the current imbalances of the US economy. But according to him, that transition needs to happen. He also thinks the government is doing no one a favor by trying to "ease the pain" with stimulus packages, bailouts and such. Schiff believes these actions will only make the situation worse and possibly result in hyperinflation if the government continues to "replace legitimate savings with a printing press".
As it is now we are bouncing from one sector to another to provide bailouts and stimulus. First it was the housing market where we offered low interest sub prime lending... then on to the financial sector to bail out the banks that gave those bad loans... next on to the auto industry hurting because of decreased sales and poor management and unavailability of credit in the market, now we are seeing states and municipalities crying for money and we are hearing from the transportation sector, the education sector, and on and on and on. Everyone is lining up to grab taxpayer money; and banks and car companies plan to come back for more money.

If Mr. Thain or any other bone headed CEO wishes to squander corporate funds by buying expensive accouterments for their offices, then they should be allowed to go out of business. Period. The folks they put out of work will find jobs and be absorbed into other companies who have more competent management. That is how the market works.

Capitalism isn't the criminal here. Government intervention is.

It is also complete insanity for our government to be spending the way they are on programs that continue dependency.

Stimulus programs are being devised purportedly to put money into the hands of the consumer - but in reality we are seeing that these programs amount to nothing more than a smokescreen for wealth redistribution. It is Socialism. People who don't pay taxes could end up with cash. People who lack skills and education may get construction jobs (and other government jobs) based on the color of their skin and where they live. People who got NINJA loans (No Income No Job/Assets) now expect someone else to pay off their debt. The hard working people who are being taxed in America are paying the price.

If our leaders want us all to get working again, then they need to get government to stand down. Sure, we need some government regulation, but we initially got into this mess because government decided to give incentives to bankers to loan money to bad risks. They created the housing bubble. They created the credit bubble. They are creating the problems we face. They have made it costly to start a business and to compete and they have allowed the American people to pay for services for those who are not even legal citizens. We send billions of dollars in aid to other countries when our needs go unmet here. What our Congress, and past administrations have done is a travesty. What our current administration plans to do is equally damaging.

The best thing Americans can do is to rely less on government and more on themselves.

Government can only do three main things to raise money to pay for things: Raise taxes, Create Debt by Borrowing, and Print Money (well, they can sell stuff too - like land and other assets). Our government has spent way too much, created debt that they will never be able to repay, and to solve the first two problems they are printing more money which devalues the currency and causes hyperinflation. Unending government programs - entitlements and obscene spending - and money that has nothing to back it up - has put us where we are today.

It is not the government's job to be an employer or be a financier and the more they continue and expand policies that do those things, the worse off we all will be.

2 comments:

Truth said...

Well said Judy. Why don't you take a drive to Woodstock and talk to our Superintendent and BOE.

Shannon said...

I love you. Just sayin'.

WHY can't more people see this?