In his latest column Ron Paul reminds us that freedom is our strength, while government is our weakness. Those who announce grand plans to build roads and bridges and banks and jobs and wind farms can only do so with our money as they do not own any real assets. All they can do is take, and meddle with, and redistribute the wealth that is already ours, claim credit if it works and blame the “market” if it doesn’t.
Strengthening or Weakening the Economy?
by Ron Paul
The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill. The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds. Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail. However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts. It should be that they are too big to bailout. The world will not come to an end without this or that bank. The most troubling thing to me is this rhetoric that only government can save the economy, and must act. This is so counter-productive.
We must ask ourselves what strengthens this country, and what weakens it.
Government is a monumental drag on this economy. Government at all levels currently absorbs about 35-40 percent of GDP, which is still not enough for its voracious appetite. While productivity is already overtaxed, the government routinely spends more than it takes in and makes up for the shortfall by constantly borrowing or debasing our dollars through inflation. It pains me to think of all the opportunities for productive economic growth we have given up simply because our government is super-sized instead of Constitution-sized. There are just a few constitutionally sanctioned activities for government to engage in, but it is so overstretched with unconstitutional encroachments that what it is legitimately supposed to do, it does very badly. And yet we are to believe the solution to our problems is to make government bigger. On the contrary, government makes our problems bigger. The central bank’s meddling with monetary policy led to overheated lending, and now massive defaults. The government used manipulative tax policy to distort the housing market which has had many unintended consequences, and here we are. Government is quick to enact and slow to correct bad policy. Yet in spite of government’s failures, it flourishes and grows, thanks to the continual bailouts from the unwitting taxpayer.
Big government has been tried and has failed miserably. What we need now is small government, and freedom. We need the freedom to pull ourselves up by our own bootstraps again, as we traditionally do in this country. But try to start a business or charity today, and you will understand how little economic freedom we really have left. Freedom, not government, made this the land of opportunity. Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world. The American people are strong and capable. We can pull ourselves out of this mess. All we need is for the nanny-state to get out of the way and allow us to do it. Freedom is our strength, government is our weakness. Only by recognizing this and unleashing our strengths will we solve the problems we face today.
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I am newer convert to Ron Paul and the liberty movement. Our Labor Union recently broke tradition and put up a face book account. Boeing / IAM 751.
My question, I have been attacked on numerous occassions by people saying Ron Paul hates unions, point 2, he crossed a picket line somewhere maybe Wal Mart? Have no clue, I understand why and how Ron is oppossed to socialism with tax dollars. At the same time is he oppossed to labor unions that confine their interests to safety, environmental and wages hours and working conditions? I would think not as Corporate America in many ways has raped this country in more ways then one. I see labor unions as a necessity to balance power between the have and have nots. Freedom promotes bottom up control, labor can and does do this, they also can be top down if let go out of control.
Can labor over step, YES. Have they gone too far…sometimes yes, not as far as what has been done to us by Corp America though. Help me answer or better understand Ron’s position on labor so I can win more people over to the liberty movement.
I know why I switched, for liberty, freedom, based on solid sacred ground and wisdom of our forefathers, to end the Fed etc truth! Greater moral ground etc.
Yet I still feel there is definitely a place for labor here. Help me find better understanding of Dr Pauls true position.
dgrinde@yahoo.com or blog at rankandfilefreedom.blogspot.com
Don Grinde
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What Can we common Poeple do about the Bailout? Nothing.. we just have to wait and see if the company comes up and develops new cars and prototypes to please the americal consumer
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“Human Rights” are for human beings. Are you a human being?
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I will enjoy my “Civil Liberty” which is actually the phrased I wrote, and the rights that all men are given when they are born. “God’s” law has been misinterpreted by men throughout all ages causing travesties in “God’s” name which would not be condoned by any “God.” He are some other misinterpreted “laws” given to us by men in “God’s” name that I expect you take very literally as the other passages you showed me.
“If your hand causes you to sin, cut it off. It is better for you to enter into life maimed, rather than having two hands, to go to hell, into the fire that shall never be quenched.” Mark 9:43
“Women should be silent in the churches, for they are not permitted to speak, but should be submissive, as the law also says.” 1 Corinthians 14:34
I would encourage some common sense. Civil Liberties as provided to us by MAN in the constitution and the basic HUMAN RIGHTS which should be guaranteed to every human being are “God Given” if you want to go that far and should be respected without any religious affiliation.
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Here is Ron’s quote from the article…
“Freedom laid the foundation that catapulted us to becoming the strongest economic power in the world. The American people are strong and capable. We can pull ourselves out of this mess. All we need is for the nanny-state to get out of the way and allow us to do it. Freedom is our strength, government is our weakness. Only by recognizing this and unleashing our strengths will we solve the problems we face today.”
As much as I respect Ron for what he has had the courage to bring to the debate, he is dead wrong on this issue. Christ Jesus is the Foundation upon which this republic (long gone?) rested. And our ONLY freedom will come from a RETURN to God’s Law.
Romans 8:2
For the law of the Spirit of life in Christ Jesus hath made me free from the law of sin and death.
This country used to recognize these facts of Law….
God’s Laws – “Man’s laws are strengthless before God’s laws, consequently a human law, directly contrary to the law of God, would be an absolute nullity.” Borden vs. State, 11 Ark 519, 526 (1851)
God’s Law – “Any law contrary to the Law of God, is no law at all.” Sir William Blackstone.
“God alone is the lawgiver of eternity”. Judge Henry Clay Dean, Crimes of the Civil War, 1868, pages 428-432.
God’s Law – James 4:12 There is one lawgiver, who is able to save and to destroy: who art thou that judgest another?
For those that laugh at these statements; you need not wait too long before God judges us without pity or mercy for our pride and arrogance and the INNOCENT blood that runs from the abortion clinics, homosexual marriages, etc.
“And My eye will not spare you, neither will I have pity; but I will bring recompense for your evil ways upon you, while your abominations are in the midst of you [calling down punishment from a righteous God]; and you shall know (recognize, understand, and realize) that I am the Lord.” Ezekiel 7:4 (Amp)
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I think it was Thomas Paine who said that an unjust law is no law at all. Seeing as many of the laws in the bible pertain to things such as ability to sell your daughter into slavery and the like, you might want to (going along with the Thomas Paine reference) go get some Common Sense. This country was built and rests upon the civil liberties, freedom, and rights of MEN. This is a state of many peoples and religions, so please take that into consideration before you preach.
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No preaching here, just fact. God gave us a law for all peoples through all time and Jesus Christ fulfilled the Law and man has no authority to pass any code, rule, regulation contrary to God’s Law. “Unjust” is absolutely relative unless compared to God’s Law…. check out Public Law 97-280. As to “peoples”, a fine Christian man named Patrick Henry said it best…
“It cannot be emphasized too strongly or too often that this great nation was founded, not by religionists, but by Christians; not on religions, but on the gospel of Jesus Christ. For this very reason peoples of other faiths have been afforded asylum, prosperity, and freedom of worship here.”
Time for all to ditch pride and arrogance and get on our knees before our Creator (John 1:1-14)
By the way, do you know what a “civil right” is? I don’t have any “civil rights” and I don’t want any whatever they are. This country was built on God given unalienable rights partially defined in the Bill of Rights which are not “civil rights”…..
Civil Right – “The only absolute and unqualified right of a United States citizen is to residence within the territorial boundaries of the United States,” US vs. Valentine 288 F. Supp. 957
Civil Right – “The privileges and immunities clause of the 14th Amendment protects very few rights because it neither incorporates the Bill of Rights, nor protects all rights of individual citizens. Instead this provision protects only those rights peculiar to being a citizen of the federal government; it does not protect those rights which relate to state citizenship.” Jones v. Temmer, 89 F. Supp 1226
Enjoy your “civil rights”.
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Abolish the Federal Reserve!!!!!!!!!!!!!!!!!!!!
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The fractional reserve system is immoral. It robes people of their savings, and retirement.
Nate was right, the true free market economist predicted this disaster. You Tube Peter Schiff, watch how the moron Art Lafer, along with all the other fox business analyst laughed at him in 06 and 07. or read EMPIRE OF DEPT, by Bill Bonner. Written in 05, he called the effects of this housing bubble. Their is also Doug Casey, Bud Conrad, Addison Wiggin and many others. all free market economist, all predicted this.
They didn’t predict it cause they thought interest rates were to high, they simple knew the effect of credit expansion and economic bubbles.
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Its obvious Sean went to school for Economics and was
taught modern economic theory which is why he has no idea what
he is talking about.The only stable and moral monetary system
is a precious metal currency.Banks must have a 100 % reserve requirement.
Interest is just plain wrong and when it comes to monetary policy
it should be outlawed.As well as paper fiat money( oh yea it is illegal)
see US Constitution Article 1 Section 10
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not totally correct.. the fed doesn’t weaken its currency, it stunts money flow to decline the trade balance. The value of the dollar only decreases when they print money thats not added to the deficit, or people buy foreign debt.. Also the value of the dollar can decrease if there is more money than demand, which leads to hyperinflation, but we are demanding more money. The unemployment shows that. We are demanding more money because the fed stunted money flow to bring down the price of gas to slow down the loss of money in trade, or slow down the blood from the cut wound.
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Are you talking about the recent drop in oil/gas prices? I hope not because that certainly wasn’t caused by the Fed stunting money flow.
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yes, the fed (alan greenspand) raised interest rates like 15 times in 2005-2006 bc of oil. read the news
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Just because he raised them doesn’t mean they are high. If the market interest rate should be 12% and I (the central banker) raise them from a totally absurd 1.5% to a 4%, the interest rate is still WAY TOO LOW.
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I guess you didn’t know that interest rates weren’t created as money in the first place, so they rob money from the economy. This can be expressed in a simple formula. P=principle and I=interest… P/(p+i) will fulfil their loan contracts and i/(p+i) will be forclosed.. Any interest rate is robbing the public and we will have to continue printing money because we always owe more than we have bc of interest rates…
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This has nothing to do with what we are talking about. We’re talking about high interest rates and low interest rates. You think that raising interest rates 15 times means that they’re high. This is obviously not the case.
You have a tendency to make things more confusing than they need be. Interest rates are simply the price paid in order to borrow money.
Setting interest rates below the market level robs the people. It just takes some time.
You seem to think that money = wealth.
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I dont think that at all. your putting words into my mouth like you have this whole time. Well i just explained how interest rates can be damaging when high.. You are somewhat correct, interest rates can be too low ONLY in comparison to how high it raises. This damaging effect is called negative amortization.
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no, not the recent drop in oil prices, that happened bc the demand went down. this i know. I wasn’t talking about recent declines in the price of oil. I was talking about the surging prices in the seventies and in 2005 both times causing the fed to raise interest rates
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I suspect by the time this is over, we will return to a positive savings rate. Your theory is that a central bank should weaken it’s currency to balance trade. No strong dollar principals for you then. Honestly I hope your right about all of this. I hope the massive deficits the Obama administration is embarking on has no effect on inflation. I hope the huge increase in money supply doesn’t destroy our currency.
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You just contradicted yourself. You said a recession is simply people saving income instead of spending it. Then you said, today, our savings rate it 0%.. that makes no sense, i thought we were in a reccesion.. Actually, the federal reserve manipulates the money supply through interest rates. Since interest rates have been so high for so long, not enough money was being put into the economy to match our trade deficit.
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Interest rates so high for so long? What are you talking about? They have been much too LOW for much too long.
You seem to think that we can simply print money and become prosperous. It doesn’t work like that.
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What? interest rates were artificially high stunting growth of money because the housing market seemed to be improving due to subprime lending
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“Interest rates to high”, “housing market improving due to subprime lending”? I’m speechless!
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no, the housing market artifically improved because of subprime lending so the fed voted 11-0 to keep interest rates high when ben bernarke took over.
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Its not possible to prevent a recession Mr. Utopia. A recession is simply when people return to saving their income instead of spending it. The federal reserve tries to prevent this by giving banks credit(dept)to pass on to the public. The facts are though, the more people spend and go into dept, the more they have to save afterwords. This is the primary reason a recession was delayed for so long. American used to have a 30% savings rate, today that rate is 0. I believe Warren Buffet was right when he called America “Squander Ville”
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and just so everyone knows.. inflation is not the term for printing more money, or it would be physically impossible to experience deflation.
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Incorrect. Inflation is an expansion in the supply of money/credit. Deflation is a contraction in the supply of money/credit. Get your definitions straight.
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my definitions are straight according to dictionaries and yours are wrong. you should learn how to use valid resources.
“inflation- a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency” -dictionary.com
“deflation- a fall in the general price level or a contraction of credit and available money.” – dictionary.com
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Strange how most everyone who defines inflation as merely a general rise in prices didn’t see the current global economic crisis coming while most everyone who defines inflation correctly knew exactly what was going on.
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What are you talking about? how do you know if the dictionary predicted the global economic crisis?? Actually, it was the people in the early nineties who warned us about the dangers of free trade and trade deficits.. It was also the fed in the 2000′s warning us about rising gas prices proping up trade deficits causing recessions.
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I wasn’t talking about the dictionary. Which is why I referred to “the PEOPLE (everyone) who define inflation…”. It goes back to the original point that using the proper defintion of inflation helps one to better understand the causes and consequences of economic happenings.
Central banks cause the business cycles we see today mainly thorugh the artifical lowering of interest rates. It creates malinvestments and encourages the misallocation of capital.
Trade deficits are indeed troublesome. Free trade is not. But we don’t have and really never had free trade anyway.
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the federal reserve raised interest rates like 15 times in 2005-2006 to curb gas inflation, or the increasing price of gas. The federal reserve didn’t do this to keep the value of the dollar up, they did this to keep the price of oil down to reduce the trade deficit. The federal reserve’s purpose is to fluctuate how much money is in the economy. The price of gas is money extracted from our overall supply. We consume 20 million barrels of gas a day. Thats an idea of how much money we are depleting from the economy.. Even the federal reserve has written reports saying that the raising price of gas is deteriating our deficit. So we should understand that free trade agreements have destroyed all our manufactoring jobs, and our peak oil has declined domestic crude production.. These are the two things we have to understand in order to prevent future recessions.
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[...] Ron Paul [...]
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One stupid question form Europe: If the goverment is inconstitutional… can you sue “it”?
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Sean, I’m going to break this down Barney style for you. Scarcity gives things value. Its the reason the 2 most precious things in human nature(Oxygen, Water)are free. There are plenty of them. Yet if you were to ask a thirsty man in the desert to pay a million dollars for a glass of water, I assume he would pay it if he had it. This is why your argument is shortsighted, the scarcity of green pieces of paper called money give them value. So when the Federal Reserve simply floats more pieces in the economy. They lose value and purchasing power. And that the reason for the constant inflation in our economy. Without the constant increase in money supply. Supply and demand would just cause prices to bounce back and forth, and recessions would come and go faster. The current system prolongs the boom, and the recession. that’s why we had the roaring 20 along with the great depression, and that why this is probably going to be a depression as well. Except this time with Helo Ben in the cockpit, there is a real probability of hyper inflation
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You dont know what your talking about. The depression happened in the 20′s because the fed didn’t step in and do anything.. You should know that we messure inflation through the price of goods and not the supply of money.. You should also be smart enough to realize that the scarcity of money is the same, not you or any other individual are going to see a dime of that money. So the scarcity, or availability of money is going to remain the same, through your salary or pensions.. I guess you read ron pauls little deal about inflation and magic elves, but i guess you didn’t think to realize that there aren’t any “magic elves” giving you any money.
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What are you a Central Banker? Are you really trying to convince me that the money supply has no effect on inflation? And yes we are all aware of the definition of inflation. So what is your theory of housing prices rsising and falling so fast. supply and demand, or credit bubble caused by the Federal Reserve?
What your trying to sell is the whole money velocity theory. It simply falls short. In your world Government Debt, and a increase in money supply simply has no consequences. Maybe you should explain that to Gideon Gono.
“Banks, including those in USA and Britain are not now just talking of, but actually implements flexible and pragmatic central bank programs where these are deemed necessary in their national interests.
“That is precisely the path that we began only 4 years ago in pursuit of our national interest and have not wavered from that critical path despite the untold misunderstandings, vilification and demonization we have endured from across the political divide.”
And if your not sure who he is, do some research on Zimbabwe and their current economy.
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Why don’t you read about their economy if your gonna bring it up.. They have had problems because of the land reform program where the government distributes the land between the people..
“The results of the post-2000 land reform have been disastrous for the economy of Zimbabwe. Prior to land redistribution, land-owning farmers, mostly white, had large tracts of land and utilized economies of scale to raise capital, borrow money when necessary, and purchase modern mechanised farm equipment to increase productivity on their land. The reforms broke this land into smaller tracts (thereby destroying the economies of scale) and gave it to former black farmworkers and peasants, who had little knowledge of how to run the farms efficiently or raise productivity. Further, the refusal of banks to lend them money has limited their ability to purchase equipment or otherwise raise capital. As a result, the drop in total farm output has been tremendous and produced widespread claims by aid agencies of starvation and famine.” – wiki
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At this point, I think I agree to disagree. Let me get this straight. You believe hyper inflation happens due to land disputes. I believe it happens because of a massive increase in money supply. I think I will leave it at that
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Greenspan is a traitor but have any of you read his essay
GOLD AND ECONOMIC FREEDOM he wrote this
While he was friends with Ayn Rand
But they had a falling out later on and he turned his back on
Any moral philosophy he had
Ayn Rand later denounced him and said he had nothing to
Do with him and his keynesian ideas
If u want to change the system we need to able to refute
Any and all anti-liberty ideas
We need to change the ideas in this country
Any violence will result in either gang warfare or civil war
Ron Paul is doing just this on a political arena
We need to this in our colleges where most ideas originate
The battle is intellectual not physical
The best literature for this is ALL of Ayn Rands Books
Not just her great fiction books
Also her non-fiction
Anyone who truly loves Liberty will find her works very refreshing
You will be able to shut down anyone who even attempts to
Attack liberty
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well cars in general go thru inflation bc the price of steel always increases. the prices of raw material(including farms) raise overtime bc of growth. our population doubles every 50 years, so the cost rises to pay for production. This is called demand pull but i called gm a hidden inflation bc they had all the symptoms of cost push inflation without raising their price where as alot of other expanding production companies would.
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Cars can’t go through inflation. Milton Friedman was right when he said “Inflation is always and everywhere a monetary phenomenon”. Unless people start using cars as money (which for obvious reasons they never would), you’re just talking about fluctuating car prices.
Yet again we see how the misdefintion of inflation corrupts your good intentions.
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the price of cars inflate with everything else. Thats why cars used to cost <4,000 dollars in the seventies. That wasn’t a fluctuating price
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Okay I get it, you’re just messing around. You can’t possibly be serious with this nonsense.
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I am buying gold as an insurance policy, sorry about the typo
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Another big fan of Ann Rands was Allen Greenspan. That was until he became Fed Chairman.
As for Sean your speech on economics sounds like something Art Laffer would come up with. What did president Bush call this? Anyone, anyone? Voodoo economics, Voodoo Economics.
How can you believe in freedom if you believe that a central banker should control the money supply. This power is arguably the most one single person can have. If it is indeed supply and demand that controls inflation. Why wouldn’t the Federal reserve just start printing trillions of dollars to get us out of this slump? Oh wait, they are. Well I guess you can hope that the inflating money supply will have no effect on inflation. I on the other hand and buying GOLD, as an insurance policy.
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not me kevin…I am investing in “smith and wesson”. company of course…not a weapon…oooppps gotta go someone pounding on the door!!!
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I almost get the feeling there are certain irritating people posting here on purpose to keep the real people from reading and engaging in a useful discussion.
My big middle finger in your general direction if that’s true.
I don’t agree with Ron on everything but his govermental and fiscal policies are sound and a breath of fresh air amidst all of the current ‘bailout’ insanity.
Truth always wins in the end. But not before we somehow dismantle this disgusting corrupt system we have now. I have little faith that Obama will be able to or want to begin this painful process.
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CAPITALISM THE UNKNOWN IDEAL
EXCUSE MY SPELLING ERROR ABOVE
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FIRST I LIKE TO USE CAPS
SECOND I KNOW ALL ABOUT HIS OTHER INSPIRATIONS
HER PHILOSOPHY IS PROBABLY THE BEST WEAPON
IN THE FIGHT TO RESTORE LIBERTY IN OUR NATION
ATLAS SHRUGGED IS ONE ONE MANY GREAT WRITINGS
AYN RAND LEFT US WITH…
SHE HAS OTHER BOOKS AND ESSAYS THAT
BREAK DOWN THE CASE FOR LIBERTY SO
ELOQUENT AND PRESISE THAT EVEN THE MOST SIMPLE
COULD SEE THE LOGIC IN HAVING A TRULY FREE SOCIETY
RON PAUL IS A GENIUS AND ID TAKE A BULLET FOR THE MAN
BUT AYN RANDS WRITINGS MAKE EVERYTHING MAKE SENSE
READ HER BOOKS I DARE YOU
START WITH CAPATILSM THE UNKNOWN IDEAL
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FIRST I LIKE TO USE CAPS
SECOND I KNOW ALL ABOUT HIS OTHER INSPIRATIONS
HER PHILOSOPHY IS PROBABLY THE BEST WEAPON
IN THE FIGHT TO RESTORE LIBERTY IN OUR NATION
ATLAS SHRUGGED IS ONE ONE MANY GREAT WRITINGS
AYN RAND LEFT US WITH…
SHE HAS OTHER BOOKS AND ESSAYS THAT
BREAK DOWN THE CASE FOR LIBERTY SO
ELOQUENT AND PRESISE THAT EVEN THE MOST SIMPLE
COULD SEE THE LOGIC IN HAVING A TRULY FREE SOCIETY
RON PAUL IS A GENIUS AND ID TAKE A BULLET FOR THE MAN
BUT AYN RANDS WRITINGS MAKE EVERYTHING MAKE SENSE
READ HER BOOKS I DARE YOU
START WITH CAPATILSM THE UNKNOWN IDEAL
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So we have the federal reserve make more money for us…which causes more debt and inflation. Now we have more jobs and a poorer public. We are better off how? Only time we didn’t have debt as a country was when there was no central bank. As long as we have a federal reserve our debt will grow. They make basically counterfeit money and screw the public. Bad times ahead.
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actually. we have had debt since before we were a country from the revolutionary war. It was alexander hamilton, george washingtons secretary of treasury who set up the deficit system because there was no way for us to pay for the war. We would have a deficit if there was a central bank or no central bank..
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This is inaccurate. I’ll go through it sentence by sentence.
“we have had debt since before we were a country from the revolutionary war.”
We (the United States) could not have a debt before we were a country. It is impossible.
“It was alexander hamilton, george washingtons secretary of treasury who set up the deficit system because there was no way for us to pay for the war.”
Yes Hamilton was Washington’s treasury sec and Hamilton established a national debt. But the reason he did this wasn’t to fund the war. The INDIVIDUAL STATES had to borrow money in order to finance the war. The states could have paid back their debts over time and some were well on the way to doing so before Hamilton suggested they set up the debt/credit system and a national bank because he was a firm believer in Central government/authority and establishing a national bank which owned the states’ debts was an ideal way to do that.
“We would have a deficit if there was a central bank or no central bank”
Perhaps. But it’s a whole lot tougher to run deficits without a central bank with the ability to print money (inflation). In order to run deficits without a central bank, governments have to sell bonds to private investors or other countries. Not ideal but at least the risk involved is to be borne by private indiviuals or other countries. A central bank with a printing press allows the risk to be transferred to the unwitting public who usually don’t know what’s going on and just want to live a quiet, simple life. Terrible morality and awful economics.
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I understand fully that we had a debt before and will likely continue to have one. We had a debt to the British before the Revolution and in fact that was said to be the main cause of the Revolution.
The point I was trying to raise is that Andrew Jackson was able to get rid of our debt without a central bank. We may have developed a debt again, but in a manner that can be managed. Not just unstoppable debt caused by central banks and laws made in their favor.
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Dan – Don’t write in all caps, man – Ron Paul gets his ideas from Ludwig von Mises, Murray Rothbard, FA Hayek, Henry Hazlitt, and many others – he’s read Atlas Shrugged but he doesn’t agree 100% with Ayn Rand, although I’d guess he’d be the first to admit that she’s far closer to the truth than all of the other political hacks that are running our country into the ground.
He said as much on some question filmed and put on YouTube.
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Um I agree inflation is INFLATING THE SUPPLY OF ARTIFICIAL MONEY (PAPER)
THE MORE THEY PRINT THE LESS IT BUYS
ROME COLLAPSED FOR MAINLY THIS REASON
DEBASING THE CURRENCY
ANYBODY READ AYN RANDS BOOKS THIS IS WHERE RON PAUL
GETS HIS IDEAS
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While I agree with Ron Paul that we need to get government out of the way of free enterprise, it is also true that we need the government that is prescribed in the US Constitution to work. The “all government is bad” rhetoric has been tried and failed too. The Republicans have run that well dry. The US Constitution makes it clear that the Federal government should raise and control our military forces. To outsource or privatize that is insanity.
Yet our military is failing us. It took 25 years to develop the F-22 fighter jet when it only took 5 years to develop it’s predecessors with slide rules and paper drawings. Even the B-2 bomber which was fantastically expensive at the time only took 12 years to develop. It’s development cost half as much too, and it has the same generation of stealth as the F-22!
Our government is failing and Ron Paul is not addressing its failure. We need a military that works just like we need the government to look out for our interests in trade. Beating that old drum of less government is a good way to stay a minority party. If you want to become a majority party then you have to define yourself, not by what you are against, but by what you are for. You are for freedom? Great. Freedom to do what? Freedom to go where? Freedom to do drugs, have sex with animals, to marry whatever you please, that’s not the kind of freedom that puts a serious party on the political landscape. Freedom to explore, freedom to invent, freedom to create – that’s the message of hope – of REAL hope.
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very good defens you have done NO homework at all…military does not purchase anything or develope any weapons…privatize our military??? where did you hear doctor paul say that? the f-22 is a multi functional weapons platform while b-bombers have one job.Our govt is failing because it has become a democracy…not the republic that was intended by the founding fathers…so now the majority party that promises the most services gets elected…NOT one single part of the bill of rights has not been broken I.E. abridged!!! but then again you are a very busy guy with all the exploring,inventing and creating you are doing…what happens when 51% of the voting block works for the govt.? The rest of us are???? what???
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Sean,
I believe you do understand the meaning of inflation however you are misinterpreting it to others even from your own source at investopia. If you look at the causes of inflation according to your source the first one they list is -Increase in the money supply. Inflation is measured by increases in the CPI and PPI. The reason the CPI and PPI increase is due to an increase in the cost of goods for companies. This very increase in the cost can be due to several factors however the one true long term cause which will ALWAYS remain supreme in the long run is directly the INCREASE IN MONEY SUPPLY! It all boils down to that one factor in the end no matter how you dice it. Look at a long term chart of money supply and observe the increase in fiat money over time, then look at a long term chart depicting inflation over the exact same interval of time and notice the correlation! The bottom line is inflation is caused by the printing of money by the evil cartel controlling this planet, the federal reserve. Swallow your pride and read “The Creature from Jekyll Island” by Edward Griffin. Do some real research on the subject and find out the truth about this central bank you think we need so much.
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its an increase in demand from an increase of money. so yes thats kind of true, but this bailout money isn’t getting into the hands of consumers
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Banks are run by consumers.
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No, the money that banks give to consumers is fiat money, not principle money, which is the kind that they hold in reserves.. If you have ever boughten a house or a mortgage, you would know that banks recieve 10% down as reserves and print the rest out of thin air. This is called fiat money. It is the money that circulates our economy. That 10%, or reserve money, always remains so their cannot be a run on the bank.
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Dude, your posts are scaring me. There is no such thing as “principle money” (i understand it’s just a typo) but there’s not even “principal money” . There is such a thing as principal, which is the amount of money owed on a loan (exluding the interest).
Moving on, there are three types of money. Commodity money (gold/silver coins, etc), Representative money (certificates that can be exchanged for some amount of a commodity), and fiat money (paper currency not backed by any hard asset).
You are correct to point out that under the fractional reserve system they’re supposed to keep 10% as reserves. But, contrary to what you believe, this is inherently unstable and vulnerable to bank runs. Indeed, as Rothbard points out, under a fractional reserve system all banks are technically insolvent at any given time. I’ll give you a simple example later…
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The Government produces nothing!
Pres. Obama has put forth a stimulus package estimated at approx. $1,000,000,000,000 (Trillion). He proposes to add 600,000 Government jobs… government produces NOTHING!
Our taxes will have to pay the salaries and benefits for 600,000 more government hacks.
The proposed stimulus $1,000,000,000,000 and the TARP $850,000,000,000 boils down to $15,677 per U.S. Household that our Government gave away to Corporations instead of writing us a check. If they wanted to give away money.
This is based upon a current population of 305,645,359 and 2.59 people per household! ( Google of U.S. Census )
To put that $15,677 into perspective… in 2004 according to the U.S. Census the median income per household was $21,587.
Our government could have provided the median family with 72.6% of their annual salary instead of putting it into a ‘black hole’.
The first $350,000,000,000 of our taxes they gave away produce no results… the government won’t even tell us where it went!
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Ron Paul’s message is consistent, realistic, and is oriented toward long-term solutions for our ailing nation. I love hearing him expound on the economics of a true market economy, one not handheld by the nanny (great word) government.
Please keep telling the truth congressman Paul, even though it seems like few are willing to listen.
MANY young people are listening and studying the principles of limited government in order to rescue the nation from a self inflicted decline. You can count on generation Y to stand up for the Constitution!!!
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Recession to worsen in 2009
The writing is on the wall “Economic Crisis” is deepening and recession will be much worse in 2009 around the world than what the pro Israeli main stream media and politicians are telling us. Israeli’s who control major banks in USA & Europe are responsible for current economic melt down around the world. They are the one who created dubious debt derivatives which can not be priced in the first place and now can not be traded in any part of the world. These debt derivatives represent around $345 trillion which is 9 times the world GDP. The conservative estimate is world Banks have already lost close to $2 trillion and the figure may touch $5 trillion by the end of 2009.
American Economic Policy Makers and Politicians for last 4 decades have been designing economic policies for Social Engineering for the benefit of Pro Israeli Elites controlling big Businesses rather than designing them for the benefit of its common citizens. In 1960’s they tried to end poverty through “Federal Spending” by giving funds to preferred institutions and individuals, in 70’s mantra was “Control on Money Supply” can solve every problem, in 80’s the buzz word was Tax incentives to incompetent businesses supporting corrupt politicians, in 90’s Alan Greenspan come up with a new mantra that by tinkering “Federal Reserve Interest Rates” one can have a robust sustainable long term growth along with tech bubble, Enron, real estate burst, banking scams and now comes another dacoit from Wall Street Treasury Secretary Henry Paulson with a Recipe made of tax payers money called “Bail out” for trillions to be given to his friends managing financial institutions who had lost rather stolen trillions from banks all over the world using American financial institutions.
We have entered a new era where no body trusts any body and financial institutions. These institutions have no credibility for a simple reason the Managers have not been punished for taking their companies in the gutters by loaning money to those who should not be given any loan in the first place. Neither the regulators have been punished for not supervising the Managers nor the Politicians have been punished for not punishing the regulators and Managers. Rather Managers are every day being rewarded by Henry Paulson and politicians from both sides of the isle with tax payer’s money using the same set of regulators as the Supervisors.
Americans have lost more than $10 trillion in collective house hold wealth and are scared to spend what ever is left even on basic things. They don’t see any hope and a Leader who can break the cozy relationship of Politicians and big businesses. The Banks are sitting on more than $800 billion reserves which is 60-70 times more then their usual reserves and still they are not lending. On top of this 80-90% of these reserves represent Bail out money given by these very tax payers who are being deprived of credit. Students are being loan sharked at 11% and consumers for basic goods at over 20%. CITI is still paying 14% dividend to its share holders despite getting bail out money and guarantees for over $350 billion. The reason for not lending could be these Banks have much larger bad debt exposures which they are keeping off their balance sheets. Politicians, Bankers and main stream Media does not want the common person to know about it.
Team Obama’s proposed $1 trillion stimulus package will prove a drop in the ocean. We will see after Banks & Auto Industry; Private Pension Funds, State Governments and host of other Industries asking for Bail Outs with Tax payer’s money. Obama’s contention that America ’s roads and bridges are crumbling and by spending on infra structure projects Economy can be revived is baloney. The value of every asset from Shares, Debentures, Bonds, real estate, commodities, Cars and oil etc has fallen and are falling every day. This has destroyed demand and to make the economy worse the Banks are not lending.
Obama and his advisors are not paying any attention to the 1990’s similar Bank Scams in Japan and the government bailed out its banks with tax payer’s money. In the same manner America is handling its massive Bank Scams by giving them tax payer’s money. There were 7-8 stimulus packages for massive infra structure projects but each failed to revive Japan ’s economy for more than a decade because no serious efforts were made to reform the financial sector and big money dependent politics. It was its corporate sector with export of goods all over the world which saved Japan from disaster. How the massive construction projects can revive US economy which is 85% service oriented? How will team Obama by building Bridges and Roads open up the frozen credit markets?
Then Team Obama is forgetting some of the European Banks like Deutsche Bank, Barclays PLC, Royal Bank of Scotland has assets 100 to 140 % more than the countries GDP they belong to with UBS toping the list with assets 450% more than Switzerland ’s GDP. European Bank’s exposure to emerging economies & export oriented economies is six times the US Bank’s exposure to sub-prime mortgages. The global demand practically for every thing has crumbled and the export oriented economies especially in Eastern Europe and some parts of Asia are on the verge of collapsing. For example Austria ’s banks are most vulnerable with emerging market exposure around $300 billion against Austria ’s GDP of $370 billion. Any European bank failure will trigger a chain of bank failures across Europe and Asia with tremors in America and South America .
The developed nations Leaders rather than looking for viable solutions to revive world economy are siding with Israeli’s in their attack on civilians in Gaza . They are also instigating a failed economy Pakistan and socio-economically failed India with world’s largest poor 700 mil in the world to strip down for a fight. So that no one could notice the present economic melt down was brought by Israeli bankers with American support.
The current bail out efforts by Leaders representing big money has failed to restore confidence in financial institutions. Since no one trust any body; $6 trillion in global money market funds are sitting idle. Team Obama and its counterparts around the globe must work together to restore the trust and faith of the public in their financial institutions. They must prosecute executives, regulators and politicians who are responsible for the massive financial meltdown. The world governments collectively must come up with credible financial reforms that are more transparent and at the same time are capable of preserving the capital and flow of free trade. The era of inhuman pay packages, bonuses and perks must come to end in the corporate world. Above all they must put an end to the nexus between big money and politics. No politician should be able to buy the top Public office of their country like Obama who paid almost a $1 billion for the US Presidency and tenancy of White House for next 4 years.
Dave Makkar
P.S. I refused to call Jews or any one American when they can serve in the Army of a foreign country and can vote in the elections of a foreign Country. In the case of Jews while holding American Citizenship they can serve in Israeli Army like President Elect Obama’s Chief of White House Staff Rahm Emanuel and can vote in Israeli elections.
It is a debatable issue how one can trust such a privileged class of Jews First with loyalties to its own morally & ethically corrupt as well as racist Leadership of Israel in any country?
Also Read
INDIAN PANORAMA NEWS PAPER
Thursday, November 22, 2007
AMERICA HEADING FOR RECESSION
AMERICANS & WORLD MUST PREPARE FOR RECESSION
http://mormon4president.blogspot.com/2007/11/america-heading-for-recession.html
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Refreshing to hear from Dr. Paul today. Thanks for the update!
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Sean,
You need to learn fundamentals before you start giving analysis. If your rhetoric made any sense, I might consider countering you.
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I know what i’m talking about.. there are different view points on economics. Mine or more dominate. Check this out…
http://www.investopedia.com/articles/05/012005.asp
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“In this look at what inflation is and how it works, we will ignore the effects of money supply on inflation”
That’s a nice link, but it’s pretty much not concerning what’s actually going on at all.
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ya, bc it is too difficult to factor in the money supply, bc it is determined on how much money gets into consumers hands, not how much money is made. This is why increasing wages actually causes high inflation.. We tend to look at the demand side of money and not the supply because we are losing money due to trade deficits..
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When the supply of money is increased (inflation), the purchasing power of every unit goes down. The idea that giving newly “printed” money to the financial industry isn’t going to lower the purchasing power in the long run is exactly wrong. It won’t make much of a difference in the short run but give it time. It’ll show up eventually, it always does.
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no, when demand increases, purchasing power of every unit goes down by definition.
“Inflation is defined as the rate (%) at which the general price level of goods and services is rising, causing purchasing power to fall.” – Reem Heakal.. not the other way around.
and no it wont reach consumers hands, the money is used as reserves, not handouts to consumers.
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Oh I see what happened here. You (and Reem Heakal) have the wrong definition of inflation.
Inflation is quite simply an increase in the supply of money/credit. The rising prices are a CONSEQUENCE of inflation, not inflation itself.
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“inflation- a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services”-webster dictionary
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Meh. Webster’s is wrong too. People have a tendency to alter the meaning of words over time. The word “liberal” has quite a different meaning today than it did in the 18th century as well.
Best to stick to the proper definition because if we define inflation as a general increase in prices, it removes responsibilty from the government/central bank and causes us to keep stammering on and on about supply and demand and we miss an opportunity to identify the prime cause of the general rise in prices we see. You change the definition, you change the responsibility.
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“and no it wont reach consumers hands, the money is used as reserves, not handouts to consumers.”
The money that banks are receiving is to “buy” the “assets” of unpayable mortgages. Not to reserve and hold forever and ever. So it will not just eventually, but inevitably go through the supply and demand process, because it’s money. To be a little short sighted of your comments, I would say you’re being extremely short sighted of economics, Sean.
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haha, banks are not recieving money to buy up bad mortgages… banks are recieving money to keep as reserves so they will start lending again because thats how money is put into the economy, as debt. i think your a little short sighted of economics.
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You misunderstand Andrew’s simple post. Of course the banks aren’t receiving money so THEY (the banks) can buy up bad mortgages. They own(ed) the bad mortgages and the CDOs! Why the hell would they be given money to buy the toxic assets they already own? The FED bought the worthless “assests” in exchange for new dollars.
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but my point remains valid. that money isn’t being put into the economy.
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Ah yea, I meant we are buying the banks bad assets. Not that they are buying assets. They’ve already done that, for which of many bad reasons. But by us giving them money, the hope is that “they can use that to become profitable again.” And when they become profitable, they will use their money(that we’ve handed to them) for their business to become more profitable, whichever way they try to make that happen. Essentially, you can’t discriminate between two dollar bills even if one is in a banks “reserve” and one is up your nose with coke going through it. It’s all money, that is legal tender inside of the economy. They didn’t create a whole different special economy for the money we gave them. It is legitimate money, that can be used however they want it to be used. Right now they need to use it to not go bankrupt. When they’re in the clear, IF THAT HAPPENS (maybe that’s why they’re buying gold), they can spend their currency any way they see profitable.
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your missing the whole point andrew. Money doesn’t inflate until it reaches consumers hands. So until you get a piece of that money, you can’t go buy coke with it creating more demand and prices to raise.
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well actually the term your thinking of lost its meaning bc the majority of professional economists understand that more money just doesn’t equal inflation. Your right, inflation is everywhere, but a steady rate of inflation isn’t a sign of a devaluing currency bc the rate of gold and foreign curriencies naturally fall against the dollar.
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I never said or implied that “inflation is everywhere”. Since is a monetary phenomenon, it can’t be everywhere. Most economists are wrong in their definition of inflation. The Austrians have it right. Also, the notion that “the rate of gold and foreign currencies naturally fall against the dollar” is simply absurd.
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you don’t even understand the austrian concept of inflation, so don’t act like you do.
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hahahaha good one. I’ve already properly defined inflation so I won’t bother doing so again. I understand what inflation is. You are the one who is confused.
You speak of liberty and individual freedom but you want a central bank with the ability to create fiat currency out of thin air and apparently have no problem with the gov forcing people to accept it as legal tender. How do you square that circle?
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Just for good measure…
“What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation.” – Ludwig Von Mises, Planning for Freedom, p 79
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“your missing the whole point andrew. Money doesn’t inflate until it reaches consumers hands. So until you get a piece of that money, you can’t go buy coke with it creating more demand and prices to raise.”
It is inevitable that we all will have a piece of that pie. Pretend we lived past right now, we’ll have to deal with that eventually. You’re saying that right now it’s fine, just don’t think about tomorrow?
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reserve money always remains in holding so there wont be a run on the bank..
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You are false.
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Not when you have a fractional reserve system. We wouldn’t need FDIC if they were held in full reserve.
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giving money to the financial industry is not going to lower purchasing power in the long run. That money doesn’t go through the supply and demand process.
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I don’t understand your points Sean. Are you trying to tell me that by printing more money (ie-increasing the supply of money) you are not going to lower it’s purchasing power in the long run?? I dissagree. Supply and demand is a law, not a theory. If it wasn’t, we could just print trillions of dollars to pay all our debts to China and elsewhere and have no consequences.
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http://www.investopedia.com/articles/05/012005.asp
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The biggest mistake is thinking that the supply of money determines its value.. By definition, it is the purchasing power of money that determines its value.
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I disagree with the monetary policies, but ron paul strikes a chord with limited government and freedom. I think that there is a big misunderstanding about economics and inflation.. The biggest debate in economics is wheather we can have unemployment below 3% without experiencing severe inflation. This is why economics is not free and needs the help of a central bank. I am going to try to explain inflation as easy as possible. There are two types in my eyes, hidden and not hidden. A good example of hidden inflation is GM. GM has been around for a hundred years. You would think that they would have enough money to prevent from becoming bankrupt with all the revenue it recieves. Well instead of adding their profit to a big money pile, they spend the money to expand. They build new factories and new cars. The reason they are going bankrupt is because they are not selling the cars they spent all their money on. Since GM is in a competitive market, they don’t raise the price of their cars to pay for production, so inflation is hidden within the companies own expense and doesn’t show in the market.. Another type of inflation lets say comes from a farmer. Lets say he hires people to work 40 hours a week off a 10 acre property. Consider the population/economy growing 3% a year, after 10 years he would need 30% more production. Well, he would need to hire an extra worker, buy 3 more acres of land and if he wants to expand, consider shipping. These extra fees factor in to the cost of goods or value of money.. Whenever we talk about supply and demand, which is the key to economics, we stress the importance demand. When there is more money being put into consumers hands, there is a larger demand and production fees add up quicker.. We are always experiencing inflation bc we are always growing, but when demand increases, inflation prices on goods occur at a faster pace.. The reason i’m saying all of this is because the bailout money is not reaching the hands of consumers, its not creating an increase in demand. This is why production costs have gone down and our dollar is deflating as we speak.. When Germany experienced hyper inflation during the twenties was because they tried fixing wages and giving people more money to become more wealthy.. Of course that would raise the demand for goods. The reason why it hit so hard is because they increased money for 10 years before increasing demand. When demand increased, there was no way to pay for the demand in production or supply. So they made money less valuable by not only increasing the supply of money, but increasing wages and the availability of money ultimatly manifesting an uncontrolable demand for goods. Until the money printed reaches consumers hands, its buying power or value stays the same. Until we get a piece of the pie and the bailout money, what everybody foolishly wants, we wont experience a rapid increase inflation of cost or price of goods.
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Little off topic, but here it goes anyways.
When I was first told by a friend to look up Ron Paul, I expected more of the same political non sense that is all around. After spending a few minutes reading this site, I became hooked and check here almost every day.
What really bothered me was while I was watching CNN several days ago, they have a program called “News for Me”, which I guess is suppose to take a more comical look at the news. On this episode, they were talking about presidential candidates. After poking fun of John McCain and the like, they brought up Ron Paul. What really confused me was it was just a one line comment, something like “Remember Ron Paul? What a crazy campaign that was.” The moved quickly on to the next candidate without an explanation.
Reading this site and all the comments, this to me is not just some crazy internet fad, but instead it is a collection of people who truly care about the issues and take time to express their views clearly and concisely. While I don’t agree with Ron Paul on every single issue (ie Abortion), I respect him for truly believing in what he says, and not just saying what he thinks the public wants him to hear. I would like to thank everyone on this site and Ron Paul for giving me something in politics and the government to believe in, and a better hope for the country and the world.
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well put. you should have gone to the rally for the republic. there was so much energy and confidence. we need as much exposure as possible to inspire conscious thinking.
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The last time Ron paul was on the dick armey show, our largest emmy award winning morning talk show host gave him props. Besides looking for ron paul, i havn’t heard him meantioned any other time.. Exposure is key. Do you think britney spears became famous because of her music? or was it seeing her 20 times a day on tv that made her popular? Appearance is gold.. I’m not sure how much advertisments cost, but i understand their purpose. If we had advertisments on tv, I’m sure there would be a dramatic rise of support from individuals and the media.
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GM is not going bankrupt because of hidden inflation. Competition in the free market is not “hidden inflation.” Just because they don’t raise the prices on their cars to stay competitive, doesn’t mean that the effects of this are inflation-related. Their business decision to take their profits and invest it (unwisely) in making large cars with poor gas mileage, and not appealing to the market is the reason they are going bankrupt.
I’m not sure I understand the rationale behind the farmer example. A growing economy at 3% a year doesn’t necessarily mean the farmer has to put out 30% more production in 10 years.
The effects of inflation would be much less of an issue if the government allowed us to keep what we earned and allowed us to spend it where we liked. This is what keeps a free market economy working. Telling the American people how to spend their money, taxing them to death and giving the money to businesses who made poor decisions is exactly the wrong way to handle this economy.
Would you mind explaining your inflation logic to me?
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Mike,I have to disagree with you. GM is going bankrupt because of the UAW and government unfunded mandates to produce smaller fuel efficient cars that weren’t popular.
They have responded. The big cars of today are not the same as the big cars of the past. GM has made bad decisions. They should pay the price and pick up the pieces with competitive union contracts!
However, the Government also interfered with the Mortgage/Banking industry with their ‘affordable housing mandates’ starting with Jimmy Carter and pushed along or ignored by the Bushes, HW, and GW. They coerced banks to make loans to people that were bad risks. The housing market started a correction, the ecomnoy started to sloe down and they fueled each others decline.
Given all that, if the government wants to stimulate the economy, give the money back to the taxpayers.
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You know nothing about economics and your explanation on monetary policy with regards to suply and demand for goods,and suply of money makes no economic sense.The problem with Gm is very simple,they forget and abandoned the principle and the ideal upon what they were built.You earn acording to your ability to satisfy customer,and thats how you stay afloat and grow,not that people hate ford vehicle and love toyota vehicle,people hate things that dont work good and give too much a problem.Sound like you are a friedmanite.Not good on money.
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u should look up cost push inflation and demand pull inflation
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Economoics in its pure sense IS supply and demand. Increasing the supply of money not backed by anything except promises, decreases the value of money. Inflation is NOT the increase in prices, but the continuing devauation of the the dollar. The devaluation of the dollar only makes it appear prices are rising. It is time we see our economy in this basic sense. Ron Paul is 100% correct in the need for a return to sound economic policy, starting with a currency backed by gold and silver, and the constitutional limitations again enforced on government spending. However, until we get a majority of Ron Paul’s in congress to straighten out our economy, nothing will change.
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Actually, a steady rate of inflation doesn’t devalue the dollar bc the cost of gold and other countries currencies naturally fall against it.. Your right, economics is supply and demand. When there is too much supply in money with not enough demand, the outcome overtime will result to hyperinflation. When there is too much demand for money and not enough supply, we go through a recession like we are now with high unemployment rates.
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