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With regard to those “dire consequences”

January 8, 2009

I just read Obama warns of dire consequences without stimulus and couldn’t stop thinking of the speech given by President Bush, warning of the complete devastation of the economy in the abscence of the $700 billion bailout. That bill passed, and Secretary of the Treasury Paulson set about to spend our tax dollars buying up all those troubled assets.

About half way through his spending spree, old Hank decided we didn’t need to spend all the money quite yet. The promised devastation has not materialized. The vast majority of Americans still have a job, a place to call home, transportation and food on the table. There may be a belt-tightening underway as some of us learn what our elected representatives have either forgotten, or never knew: how to live within our means.

So President-elect Obama is warning of dire consequences if we don’t spend yet more money to stimulate the economy. I don’t think any person facing bankruptcy has ever spent his way to prospeerity. Indeed, the only people who will prosper from this wave of irresponsible bailouts — for which there is no Constitutional authority — are the banksters.

What are those dire consequences to which he refers? Businesses will go bankrupt, unemployment will rise, we’ll experience deflation and a reduction in the size, scope and power of government. Breaking them down into two pairs, one can easily see that the so-called dire consequences are temporary in nature and produce two distinct benefits.

Nobody — business owners or employees – enjoy seeing business failures. However, when a business can no longer generate revenue to pay for its staff, facilities, utilities and products, it is in fact bankrupt. No amount of papering over the obvious will change simple reality. The assets held by the business are sold at market value (that is always less than the seller would like) to another business or businesses who have the resources to purchase those assets. Those buyers generally purchase those assets to either start or expand their own business, thus creating possible employment opportunities.

The last two will only bother those who depend upon ever-increasing prices and those who hunger for power.

Deflation holds the potential of affordable housing. That statement will anger many people who simply paid too much for a durable good. They’ll find themselves paying much more than the propety is actually worth. Not good for them, but great for everyone who currentlly rents, but would love to own. Prices of consumables will drop, making things we use every day more affordable. Other durable goods, from appliances to vehicles will also become more affordable.

Those in power seek to increase their control over the governed. We are undeniably the most regulated populace in the history of the world. There are laws prohibiting us from cutting oranges in California motels, hotels and inns. Fines and incarceration await those in Virginia who choose to engage in sexual relations with the lights on. I could go on for a seeming eternity listing all the stupid laws that some well intentioned legislative body bestowed upon the governed. The point is that government, at all levels, has usurped power from the true holders of power (that would be you and me – the people) and are loath to give any of it up. Gone are the checks and balances we learned about in government schools. Those governmental entities are in serious need of a diet!

Now, about those loans we take out to finance this obscene abuse of taxpayer dollars. They all come with interest due. One day, in the not too distant future, our children and grandchildren will wake up and realize that they’ve been sold into bondage. There’s a legacy to be proud of – NOT!

Until next time,
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