Post by bolverk on Oct 22, 2008 16:01:52 GMT -5
Source Data
October 17, 2008 9:00 am EST
After several huge, government bailouts, and other measures placing trillions of taxpayer dollars at risk, the nation’s financial system remains far from stable. There is much more work that needs to be done before the economy will return to its growth path, but it cannot be more of the same, heavy-handed government mandates that have failed us time and again.
The ongoing financial crisis demonstrates why, first, we must limit political interference in the economy. It was sustained federal pressure to increase mortgage lending, through Freddie Mac and Fannie Mae, as well as the Community Reinvestment Act, which helped generate the huge economic bubble that just burst at great cost to every American.
Limiting political interference in the economy also requires limiting the ability of the Federal Reserve to manipulate the currency for political purposes. The Fed’s “easy money” policy over the last decade greatly contributed to an artificial increase in lending and property values. Unfortunately, it is the drop in those values which is the basis of today’s crisis. The ill-advised loosening of SEC regulations that had been in place to insure solvency and transparency in the operation of major investment firms, also contributed to the current financial crisis.
...
Over the longer term, we must deal with the mountain of future federal liabilities and obligations—FDIC bank guarantees, Pension Benefit Guaranty Corporation promises, Social Security and Medicare liabilities, and more. So far just in the past few weeks, the federal government has undertaken roughly $2 trillion in bailouts. Total unfunded liabilities for Social Security and Medicare, that is, the excess of promised benefits over expected revenues, exceeds $100 trillion -- more than 50 times as much as these recent, costly bailouts!
Still, nothing is being done to address the looming fiscal catastrophe they portend.
Although the federal government can try to bail-out everyone else, there is no one to bail-out the federal government. We won’t be able to count on the Chinese, Japanese, or anyone else to purchase our increasingly high mountain of debt.
The American people have repeatedly demonstrated their capacity to meet great challenges. The government must stop interfering with their ability to prepare for future challenges. America can and must once again lead the world in economic power and growth, through exercise of a free-market economy; not follow meekly behind the U.K. and our other European friends that for decades have been pushing our country to emulate their model of centrally-managed economies.
After several huge, government bailouts, and other measures placing trillions of taxpayer dollars at risk, the nation’s financial system remains far from stable. There is much more work that needs to be done before the economy will return to its growth path, but it cannot be more of the same, heavy-handed government mandates that have failed us time and again.
The ongoing financial crisis demonstrates why, first, we must limit political interference in the economy. It was sustained federal pressure to increase mortgage lending, through Freddie Mac and Fannie Mae, as well as the Community Reinvestment Act, which helped generate the huge economic bubble that just burst at great cost to every American.
Limiting political interference in the economy also requires limiting the ability of the Federal Reserve to manipulate the currency for political purposes. The Fed’s “easy money” policy over the last decade greatly contributed to an artificial increase in lending and property values. Unfortunately, it is the drop in those values which is the basis of today’s crisis. The ill-advised loosening of SEC regulations that had been in place to insure solvency and transparency in the operation of major investment firms, also contributed to the current financial crisis.
...
Over the longer term, we must deal with the mountain of future federal liabilities and obligations—FDIC bank guarantees, Pension Benefit Guaranty Corporation promises, Social Security and Medicare liabilities, and more. So far just in the past few weeks, the federal government has undertaken roughly $2 trillion in bailouts. Total unfunded liabilities for Social Security and Medicare, that is, the excess of promised benefits over expected revenues, exceeds $100 trillion -- more than 50 times as much as these recent, costly bailouts!
Still, nothing is being done to address the looming fiscal catastrophe they portend.
Although the federal government can try to bail-out everyone else, there is no one to bail-out the federal government. We won’t be able to count on the Chinese, Japanese, or anyone else to purchase our increasingly high mountain of debt.
The American people have repeatedly demonstrated their capacity to meet great challenges. The government must stop interfering with their ability to prepare for future challenges. America can and must once again lead the world in economic power and growth, through exercise of a free-market economy; not follow meekly behind the U.K. and our other European friends that for decades have been pushing our country to emulate their model of centrally-managed economies.
