25 September 2008
Rush to Judgment
Posted by Joy Bischoff under: World Economy .
Rush Limbaugh was not a go to guy to understand the realities of our fiscal policies until this crisis became obvious. Now he gets it. This morning he is saying again and again that this bailout is a nationalization of the financial system and the end of free market capitalism. He is right. His judgment of this situation is based on conservative fundamentals.
Rush shared opinions by financial experts that in the long run, the government could make money from the bailout as the markets recover and they are left with valuable property. So why isn’t that a good thing? He goes on to explain that anyone who thinks this potential windfall would come back to the taxpayers doesn’t understand how government works. Instead it will go to more government programs and increase the reach of socialism.
Why is the government the only entity capable of fixing the broken system? Because the Federal Reserve will print more fiat money. Here is the definition of fiat money from the Wikipedia:
The terms fiat currency and fiat money relate to types of currency or money whose usefulness results, not from any intrinsic value or guarantee that it can be converted into gold or another currency, but instead from a government’s order (fiat) that it must be accepted as a means of payment.
The Federal Reserve is a private and not a governmental organization but from what I understand, if the new reforms are passed, they will then in effect become an actual part of the government. Washington and Jefferson both knew the pitfalls of this and worked hard to try and keep it from happening, as did other presidents such as Andrew Jackson. Control naturally spreads from the hands of those who hold the purse strings and people comply because money is their god.
So what is the alternative? It is not pretty, I will not lie. And that is because our government will not do the right thing. In the United States, profit has become a dirty word. China and other socialist countries have introduced a form of capitalism because they came to understand that the incentive of profits spur people to productivity. Here, people hate those who have wealth. This will eventually bring equalization of wealth and that always means going down to the least common denominator, not moving upward.
To remove capital gains taxes and stringent corporate taxes would jump start job creation and put a greater flow of money into the private sector. They won’t do this because of the political correct rhetoric that makes us ashamed of the wealthy.
How did we get here? Propping up a failed system of corruption and when trouble comes, printing more fiat money. Last week I shared some of the history of the Weimar Republic in Germany that devalued their currency and opened the door for fascism. People love their money and fear its loss so much that I am afraid they will welcome socialism with open arms. If so, we deserve what we get and shame on us. But don’t give up yet, let your senators and congressmen know how you feel. We have to keep trying. If the bailout goes through, and it appears it will, the system may stabilize but only for a time. Why? Because getting into debt and printing more money is what got us here. What is the government solution? Getting into more debt and printing more money. It will bring us to our knees, it is only a matter of time.
I don’t expect anyone to take my word for it and I admit I am only one more opinion but think of one thing. Last January I was writing here about this very situation and predicting 2008 would bring economic chaos based on the above criteria. Once the fundamentals are grasped it isn’t rocket science. History does repeat itself and we refuse to learn from the past. So my advise is to strengthen home and family and get close to the Lord. That is the only place peace will come from.
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