 WHAT’S A FREE MARKETEER TO THINK?
Volume One
In response to the federal government’s mammoth new involvement in financial markets, on Monday I invited a number of think tank and other colleagues from around the country and Minnesota to address a purposely free-swinging question: “What’s a free marketeer to think?” We will quickly email and post their columns as they come in over the next few weeks. I trust you will find their views consistently insightful, provocative, and helpful.
These first four pieces are by Jeff Sandefer, a director of both the Texas Public Policy Foundation and National Review magazine; the Rev. Robert A. Sirico, president of the Acton Institute in Michigan; Craig Westover, a senior policy fellow for the Minnesota Free Market Institute; and Devin Foley, director of development for American Experiment. Many thanks, and as with everything the Center does, I welcome your comments. Mitch Pearlstein
Founder & President
Center of the American Experiment |
A Bailout that Sacrifices Freedom for Dependency
By Jeff Sandefer
Throughout our nation’s history, the size and scope of government has grown by leaps and bounds during times of crisis, financial or otherwise. The political class’ natural instinct is for government to rush to the rescue, particularly when an election is near. The current financial meltdown appears to be no exception, as our government responds with a $700 billion taxpayer-funded bailout that is at best a Band-Aid and at worst a more deadly strain of the same disease.
Rather than punishing taxpayers, an array of smarter options is at the government’s disposal: abandon cheap-money policy; remove financial incentives that make home purchasing so easy for those who don’t yet have the means to own a home; let solvent firms naturally emerge from the mess while firms without sound business models go under, just to name a few.
Many people have played into the hands of big-government apologists by arguing that free markets are "better" because "they work," rather than defending freedom as a fundamental, God-given right for everyone.
I was fortunate to be with Margaret Thatcher once in England when she reminded a group of Americans fretting about a temporary dip in the stock market: "The most important word in the phrase 'free markets' is not the word 'markets.' You cannot justify your freedom based on today's Dow Jones Industrial Average." Her words ring true, as Bush appointees scramble to stoke the engine of our economy by tossing in ever-larger quantities of our tax dollars and freedom.
Charging the Federal Reserve, investment bankers, and politicians to "solve" this crisis is like deputizing arsonists to fight a wildfire. The central enabler is the government, with Wall Street hucksters as eager accomplices. It’s time to let the market sweep away decades of excessive leverage and loose monetary policy.
Worrying about a repeat of the Great Depression is a valid concern. But check out hyperinflation in Germany in the 1930’s, or Zimbabwe in 2008, before you decide that flooding the world in dollars is a better idea. Free from intrusive governmental tinkering, markets will clear soon enough, even if it means many speculators are wiped out.
Pouring in more government dollars into bailouts may rescue a few Wall Street bondholders, but it will only harm the average American. In the end, vesting large amounts of economic power in a few government officials simply is a bad idea. It won’t work any better here than it did in the former Soviet Union. The world economy is too complex to be managed in a top down fashion, even by a Wall Street dealmaker and a Princeton economist.
Benjamin Franklin once warned: “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.” The seeds of this problem were sown long ago, and the financial bill will be paid one way or another. The only question is how much freedom Americans will lose in the process. Jeff Sandefer is a member of the board of directors of the Texas Public Policy Foundation and National Review magazine. |
Losses are Part of the Market Process By Robert A. Sirico Consider that people complain about the market economy when there are profits and also when there are losses. But we can't have it both ways. So why aren't those who have complained about the amassing of wealth on Wall Street right now celebrating that toppling of previously invulnerable institutions? Instead, it seems like the critics of the market economy cannot be made happy. Whether people are making money or losing it, they are always ready to denounce the market for ideological reasons and advocate regulation and other forms of state intervention. We should understand a bit more about the source of the problem that emerged in the housing markets and the financial market generally before acting to remedy the current mess. The federal government's monetary system became rather promiscuous in the effort to promote homeownership, offering loose credit conditions through the two quasi-private mortgage holders Freddie Mac and Fannie Mae. It is essential that a free economy tolerate both the profit and the losses that come with this activity. But in the case of Fannie and Freddie, the profits were privatized while the losses were implicitly socialized, that is, born by taxpayers. This sets up a moral hazard. It means that people tolerate more risk than they should because the consequences will be shared. In other words, what we have here is not a free market at work but a subsidized and distorted market, one running on artificial credit and not subject to the same laws of accounting as every other institution in society. The financial events of the last weeks, and really the last months and years, are really market-based responses to earlier interventions in the market process. One has to wonder, then, what the purpose of new regulations would be. After all, were it not for the past regulations, past interventions, we wouldn't be in the fix we are in today. No one is granted any real favor when there is intervention to stop the losses associated with investments gone array. When spokesmen for the Fed and the Treasury Department talk of tens of billions, and even hundreds of billions of dollars for bailouts, we should remember those resources come from the general population in the form of taxes, debt, and inflation. It is impossible to speak of a market economy without remembering that it is also a responsibility economy. That means that people are free to profit, and there is nothing wrong with that. It is the reward for resources well invested and risk prudently taken. At the same time, losses must also be borne by those who take the risks. We need to tolerate both the rich and the situations when the rich are sent away by the winds of change. We also need clean lines of responsibility so that we know who is bearing liabilities for whom. This is the proper juridical framework for a market society. As is often in the case in a crisis, the long-run problem is not the initial crisis but the mistaken response to it. Rev. Robert A. Sirico is president of the Acton Institute in Grand Rapids, Michigan. |
The Elephant in the Room
By Craig Westover When cornered by the media early last week, Senate majority leader Harry Reid warned that a solution to the turmoil in the financial markets wouldn't be forthcoming soon because, "No one knows what to do." A few hours later, Reid and a collection of bureaucratic and congressional cognoscenti emerged from a closed-door meeting knowing exactly what to do – put taxpayers on the hook for Wall Street's debt so bankers and brokers could take a balance sheet "Mulligan."
This economic Yalta for free market advocates – much to the glee of the collectivists among us – is portrayed as the surrender of a free market Republican administration to irrefutable evidence that unfettered capitalism produces economic disaster. The Wall Street turmoil, as stated in a New York Times article, is "a painful lesson" for evangelists of the free market. True, there is indeed a painful lesson for free market advocates: Never ask a blind man what an elephant is like. "This is not a market failure as so many are now claiming," wrote Ed Crane of the Cato Institute. "It is a government failure, pure and simple." While I agree with Crane's conclusion that government intervention is the problem, the causes of our economic turmoil are not nearly so "pure" and certainly not as "simple" as Crane's disgust (and my own) with damage caused by collectivist philosophy would suggest. Like the six blind men who went to see the elephant, economists, pundits, politicians, war heroes, former community organizers and ex-small town mayors have been feeling up the situation, and not unexpectedly, their assessments of the crisis match the part they happen to be yanking on. What we have here is a problem of knowledge, the inability to see the whole problem. And therein lies the fundamental flaw with the economic mulligan coming out of Washington. Those-who-must-be-obeyed may have a plan that fulfills the collective desire to "do something," but Reid's original assessment is still the most astute – no one knows what to do. Any plan coming out of Washington is based on dubious assumptions that are taken for granted. It assumes that the gathered officials possess all the relevant information, that their desired objectives are achievable, and that they possess the available means to implement the plan. Given those assumptions, the economic crisis becomes simply a complex puzzle that a bunch of really bright people can solve, given enough money and the coercive power to implement their plan. But as F.A. Hayek notes as the general case in his essay "The Use of Knowledge in Society," which I am applying to this specific case, the economic problem of society does not have a strictly logical solution. As Hayek explains, "The reason for this is that the 'data' from the which economic calculus starts are never for the whole society 'given' to a single mind which could work out the implications and can never be so given." Paraphrasing Hayek's general argument, the financial crisis facing our elected and unelected cognoscenti is not simply a problem of how to "adjust" existing market factors to preserve the financial system – if "adjustment" assumes that all relevant information is available to those crafting the adjustment. Rather, it is a problem of how to facilitate the most effective adjustments to the financial system to the benefit of any member of society, "for ends whose relative importance only these individuals know." The misconception we are dealing with is that government can somehow come up with a solution that will simultaneously punish the wicked, reward the righteous, leave the ignorant blissfully blameless and the rest of us financially intact. The reality is that objective is unobtainable; there is no solution, only trade-offs. And right now armies of lobbyists are clashing on Capitol Hill over just what those trade-offs are going to be. When battle ends, bodies will be buried and poppies will be planted and victory declared for a "solution" that serves visible collective ends but has only serendipitous connection to the ends important to any individual, of which no bureaucratic planner can ever have complete and timely knowledge, empathy or concern. We don't need better policy for management and oversight of the financial markets. We do need policy that better facilitates dispersing economic knowledge to those making economic decisions. From the creation of Fannie Mae to passage of the Community Reinvestment Act, government interventions have jammed the economic signals that the market needs to function effectively. They have created moral hazard that breaks the bonds of market discipline and unchains greed and recklessness. We may be blind to the whole cause of the current economic crisis, but government intervention is without a doubt the elephant in the room. Craig Westover is a contributing columnist to the Opinion page of the St. Paul Pioneer Press and the online news source MinnPost. He is a senior policy fellow at the Minnesota Free Market Institute. |
Emperor Paulson? By Devin Foley Examples abound in history when real and perceived crises were used to justify tremendous power grabs. Even in the land of the free and the home of the brave we’ve seen our fair share. Recall the Alien & Sedition Acts signed by President John Adams, FDR’s threat to pack the Supreme Court in the Great Depression, the Japanese internment during WWII, LBJ’s request and Congress’s adoption of the Gulf of Tonkin Resolution, and many others.
Amazingly, we have survived them all with most of our freedoms intact, which is a testament to the Founders’ wisdom and foresight laid out in the Constitution and the character of the American people. Indeed, either Congress or the Supreme Court eventually repudiated each grab for power in the examples just listed.
Today, we are told the Republic faces another crisis. Like Caesar poised to cross the Rubicon, Treasury Secretary Henry Paulson awaits the passage of the $700 billion bailout plan to save the Republic. He points to down markets, portends financial Armageddon, and urges Congress to act quickly to cede him power.
And what are some of the powers Secretary Paulson gives himself in the Bailout Plan? · Power to purchase, on his terms and conditions, mortgage-related assets from potentially any corporation or central bank in the world. (Section 2.a)
· Power to “enter into contracts … without regard to any other provision of law regarding public contracts.” Section 2(b)(2).
· Power to nationalize the entire financial system including banks, insurers, and other financial institutions. Section 2(b)(3). · Power to regulate and set guidance at will for unknown sectors of the economy. Section 2(b)(5). · Power to increase the national debt to $11.3 trillion (Section 10).
All of this is possible with the loosely written language found in the bailout plan. After all, the plan gives the Secretary of the Treasury the power to define the loose terms of the legislation and the actions of the Secretary are not open to review by any courts or any agency. Section 8 of the plan reads, “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” What hubris occupies Secretary Paulson that he would write a law removing himself from the judicial review that our Constitution guarantees? Are you comfortable with Secretary Paulson acting on his proposed powers with no oversight by any court or administrative agency? It may seem far-fetched to imagine the following scenarios, but taking many of the proposed sections of the plan to their logical conclusions results in such possibilities and more potentially becoming true. · If you own mortgage-related assets in good standing worth $1 billion, are you comfortable with Secretary Paulson forcibly buying those assets from you for $500 million. Are you comfortable with that act when you have no access to the courts on the matter? · If you have a checking account at a local bank, are you comfortable with Secretary Paulson nationalizing that account and regulating how you can use your money in the account? Are you comfortable with that act when you have no access to the courts on the matter? · Are you comfortable as a taxpayer and an American in bailing out foreign companies and central banks when they funnel their bad debt into foreign-owned, U.S. based corporations? Are you comfortable with that act when the courts have no say on the matter?
Americans, this Bailout Plan, as currently written, is a grave threat to our freedoms, our personal property, and our Republic. Republicans and Democrats, conservatives and liberals, and any and all who believe in the importance of upholding the Constitution and our way of life ought to stop and consider just how much power our elected representatives are considering giving the unelected Secretary of the Treasury and former Goldman Sachs CEO, Henry Paulson. As it stands, the markets are only down 16 percent for the year. That drop has justified an 80 percent ownership of AIG by the United States government and the nationalization of $5 trillion in mortgages, roughly half of the mortgages in America. Additionally, $300 billion was spent on the housing bailout bill, $160 billion on stimulus checks, and $100 billion in loans to institutions such as Bear Stearns and temporary clearing loans to institutions such as Lehman Brothers. Set aside the idea of another bailout that further socializes losses and privatizes profits, remove the partisan blinders, and recognize that we are marching down the road to serfdom at a frightening pace. Come what may, we must not destroy our children’s future by burying the nation in debt and destroying the Constitution in exchange for false promises of financial security provided by one man. We must protect and continue our American Experiment in self-government. If you have not yet read the $700 billion bailout plan, click here. Devin Foley is Director of Development for Center of the American Experiment. |
WHAT’S A FREE MARKETEER TO THINK?
Volume Two In response to the federal government’s massive new involvement in financial markets, on Monday I invited a number of think tank and other colleagues from around the country and Minnesota to address a purposely free-swinging question: “What’s a free marketeer to think?”
We published four pronto columns yesterday and here, in what might be described as Volume Two, are four more by former Minnesota congressman and current Brookings Institution scholar Bill Frenzel; Shannon Goessling, president of the Southeastern Legal Foundation in Atlanta; Larry Reed, president of the Foundation for Economic Education in New York; and Devin Foley, American Experiment’s director of development. We will continue disseminating incisive pieces likes these as we receive them over the next two weeks. Many thanks, and needless to say, I welcome your comments. Mitch Pearlstein
Founder & President
Center of the American Experiment |
No Democracy will Allow its Economy to Implode
By Bill Frenzel Our credit markets are in shambles. Few Americans comprehend the reasons for the system’s failure, but nearly everybody understands that it is “broke.” Ironically, a country renowned for devotion to free markets now seems to require the government to “save” those markets.
The Bush Administration, led by the Secretary of the Treasury and the Chairman of the Federal Reserve Board, is asking Congress to enact a $700 billion rescue plan. There is heavy resistance. But, after much complaint and criticism, and the addition of its own “improvements,” Congress will probably agree to some version of the proposal.
Purists and populists alike bewail the plan. A government solution is usually a wrong solution. The greedy risk-takers should not be protected. Every other loser in the country will insist on salvation, too. Even those who have lost nothing will demand much.
Whenever the government meddles in the marketplace, whether in crisis or to respond to criminal behavior, it tends to go too far. There is always an urge to overdo the relief, or to reward an unworthy class, or to lay on too much burdensome regulation.
The critics, many of them conservatives, are dead right. A free market system should require that mistakes be corrected, and paid for, in the marketplace. The problem is, however, that no democracy will allow its government to stand idly by while its economy implodes. Most people would devoutly hope that the government would not have to intervene. But when the panic strikes, the people can usually be counted upon to demand government interference.
A basic question policy-makers need to ask and answer is this: How bad is it? If the crisis can be weathered without major damage to the economy, the urge to meddle should be restrained.
Cases for restraint would include the Chrysler and New York City loans of the 1970s, specific industry requests like the current auto industry loans, and the never-ending demands for protectionism. The economy can withstand the loss of a couple of big companies which made mistakes.
But when the whole financial system begins to crumble, the government is driven to respond. Failure to act means punishing everybody, probably for a very long time, until the system is rebuilt.
Another basic question: Whose rescue plan is to be used? When the government is poised to meddle, the time-tested rule is don’t let Congress lead. If the Executive Branch does not lead, Congress will. With Congress in charge, the rescue becomes a bidding match to shower benefits on favored constituencies. Everybody gets paid off with someone else’s money.
The good news here is that there are some successful modern precedents. Two of them are Long-Term Capital Management and Continental Illinois Bank. Those rescues were swift and successful. The system was protected and the economy hardly burped.
More to the point is the case of the Resolution Trust Corporation, a five-year rescue operation of the early 1990s. Savings and loan firms were beginning to fail in significant numbers. The financial system appeared to be at risk.
RTC was successful. Its operations shored up the system. Many S & Ls failed, but most survived. Best of all, RTC left the taxpayers about as well off as they were before its creation. Its success, and reductions from Cold War Defense spending levels, helped put the U.S. budget in the black in the mid-‘90s.
No two crises are the same. The S & L meltdown, we are told, was only half as difficult as today’s problem. Different situations require different solutions. No one can be sure that the Paulson-Bernanke rescue plan will work like the RTC did, but experts assure us the problem is serious.
So how does this free marketeer react to the Paulson-Bernanke rescue operation? He wishes that they had not been obliged to propose it. He is grateful that they waited long enough to be sure the crisis was real. Believing that it is, he is equally grateful that they have finally moved toward a solution they believe is adequate.
He prefers an executive branch plan over a legislative branch plan, and hopes Congress does not “water up” the administration’s proposal by adding pay-offs for favored constituencies. Or, more realistically, he hopes congressional add-on costs and regulations can be limited in scope.
Finally, he hopes that our fabulously successful market system will infrequently require future interventions and that the marketplace will be able to exact its own punishment for incompetence and greed.
He has regrets but no illusions about government intervention into the private marketplace. It will happen again, and often. We simply have to do our best to manage it carefully.
Bill Frenzel is a guest scholar at the Brookings Institution and a former Member of Congress from Minnesota who voted against federal loans to Chrysler and New York City in the 1970s. |
Gold. Solid as a Rock
By Shannon L. Goessling The underlying strengths of our economy, and the creative power of our people, are testament to the adage, “The business of America is business.” American commerce and industry – along with the world-sustaining entrepreneurial class – is now held hostage to a Government-Finance cartel dictating the future of our Republic This week, the world responded with a resounding NO when the $700 billion-plus bailout plan was announced – the dollar sank, commodities flew off the charts, and foreign banks threatened to stop funding the U.S. deficit. Doing “something” is not necessarily better than doing nothing, at least when the public fisc is at stake. The evidence is in: the leveraged fiat money system has run its course, and it cannot be sustained.
A startling and seriously underreported statement came from the world’s largest purchaser of U.S. dollars. "The U.S. dollar is no longer a stable anchor in the global financial system, nor is it likely to become one," said Fan Gang, a member of the Monetary Policy Committee of the Chinese central bank and director of the National Economic Research Institute. "Thus it is time to look for alternatives." Who do we think services our national debt? It’s not American free enterprise.
If the assets of Main Street are on the table, then let’s make “the people’s dollar” – the world’s reserve currency (at least for now!) and the “oil” that runs the global economy – an asset that matters. The “full faith and credit” of the American people means that this nation’s real assets, not just our ability to be taxed indefinitely and exponentially, should back our currency – precious metals, a commodities basket, or other alternative that demonstrates that the true wealth of this nation is not in its ability to print and loan and borrow leveraged money, but rather in our shared value as an industrious, innovative, and productive nation. Think it’s just not done anymore? It’s too old-fashioned? Ask the more than 40 nations who have moved back to the gold standard, including and especially Switzerland, which never left the gold standard. Solid as a rock.
The results would be nearly immediate – a refloated, revalued U.S. dollar backed by tangible assets will stave off inflationary pressures and avoid the boom and bust cycles we’ve experienced, and will once again make our markets attractive to essential foreign investment. The United States simply cannot be the world’s marketplace if the currency representing our productivity is degraded and debased, as we are currently witnessing.
American freedom, independence, and strength are at risk – this is truly a “once in a lifetime” crisis that begs for the right actions, not reactive maneuvers that fail to address the real danger. And certainly not actions that result in outright government ownership of a significant percentage of our economy.
Shannon L. Goessling is executive director and chief legal counsel of the Southeastern Legal Foundation headquartered in Atlanta. |
Not So Fast!
By Lawrence W. Reed
“Thank God we had the federal government last week to bail out the private sector!”
That’s what a rather statist friend of mine declared, almost gleeful that the financial crisis seemed to be proving how much we all need a massive federal establishment to both regulate and rescue us.
Never mind the federal government’s own indispensable role as an enabler in the crisis, from its reckless monetary policy to its jawboning banks to make dubious mortgage loans. Never mind the long-term danger of its assumption of colossal new obligations and the moral hazard in the message its intervention sends. My response to my friend was of a more narrow focus. “Thank God we have the private sector to bail out the federal government not just last week, but EVERY week!”
Think about it. Taxes on the private sector pay a majority of the federal government’s bills. For most of the rest, the government borrows by selling its debt obligations mostly to private sector entities—including banks, insurance companies, and individuals.
The federal government is the world’s biggest taxer and the world’s biggest debtor. If those of us in the private sector didn’t pay our taxes or didn’t buy Washington’s paper, the feds would have gone belly-up decades ago. We’ve rescued Washington to the tune of about $10 trillion and rising. A big difference between Washington bailing out the private sector and the private sector bailing out Washington is that the private sector has to work, invest, employ people and produce goods to come up with the cash. It can’t print it like Ben Bernanke can.
Our friends in Washington have blessed us with future burdens almost too astronomical to comprehend. In the name of taking care of us in our old age, we are saddled with no less than $6 trillion in Social Security payouts over the next 75 years for which there are no presently earmarked funding streams. The unfunded obligations for the new federal prescription drug program, enacted under President Bush, according to Brian Riedl of the Heritage Foundation, total another $8 trillion. On and on it goes. The private sector has an awful lot of bailing out to do in coming decades.
If you have any doubts about the role played in the present crisis by the very federal government now posturing as our rescuer, take a look at this article from the September 30, 1999 edition of The New York Times: http://tinyurl.com/3jdn9e. And then contemplate how deeply we taxpayers will have to dig in the not-too-distant future to pay the bills of our benevolent, compassionate and forward-thinking government.
Lawrence W. Reed is president of the Foundation for Economic Education in Irvington-on-Hudson, New York (www.fee.org) and president emeritus of the Mackinac Center for Public Policy in Midland, Michigan. |
Distorting the Very Idea of Free Markets By Devin Foley
We may or we may not be at the brink of Great Depression 2.0. Whether we are or not, the crisis will likely worsen in coming weeks and through it all, the death knell for markets, particularly of the free variety, will be sounded.
We’re already hearing how markets have failed, how greed overtook the country, and how deregulation and free market ideology are to blame. The solution? Almost always more government control.
Unfortunately, over the past few decades many policy wonks, public leaders, and politicians have claimed the ideas of free markets as their own, all the while increasing the size, scope, and budget of government. They paid lip service to the ideas, but in few ways did they actually work toward implementing the ideas. In doing so, the very definition of free markets has been distorted making public debate about whether or not markets are failing, especially free markets, terribly difficult in this present crisis.
Let’s clear things up a bit.
Are “free markets” to blame for this mess? Simply put, no. A market is basically an individual or corporation trading something of value for something else of value with another individual or corporation. A free market would be one in which the exchange is free of government regulation or manipulation. Try and think of something that isn’t somehow regulated by the government. It’s hard to do because free markets do not exist in America and have not for a very long time, if ever.
So what about markets in general? Did they fail? Are they to blame for all of this mess? Again, the answers are no. What you are seeing is the failure of government and the power of the market. Try as the government might, it simply cannot suppress the invisible hand of the market. One way or another, the invisible hand will sort things out to determine the real value of stocks, goods, houses, labor, and anything else of value.
If you walk into a grocery store to buy some apples and find that apples are $10 a pound, are you going to buy? Probably not. Is that a failure of the market? No. It simply means that the grocery store overpriced apples. So if the grocery store crashes the price of apples to something more reasonable like $3 a pound, are you going to buy? Probably. Did the market fail because the price came down? Absolutely not.
It’s the same thing for stocks and houses.
Last week Treasury Secretary Henry Paulson said, “Let me step back a bit and provide a little perspective. As I've long said, the housing correction is at the root of the challenges facing our markets and our financial institutions.”
I disagree. The root of the challenges facing our markets and our financial institutions is the government-sponsored credit binge.
Under Alan Greenspan’s leadership, the Federal Reserve opened the spigot to easy money and the country drank deeply. Money was printed and credit was made available to the banks. The banks naturally took their cut and then passed the credit on to their customers in the form of easy-to-get loans of all sorts. The customers then went out and bought houses, cars, TVs, vacations, and all manner of consumption goods. We were drunk on credit.
All of this easy credit inflated asset prices, kept the economy growing, and thoroughly indebted the country. Home prices climbed to unsustainable levels in every housing market around the country. And how do we know house prices climbed too high? We know, because the markets worked and the housing bubble popped. Just like the overpriced bag of apples at $10 a pound, the overpriced houses are coming down in price.
Sadly, now that our country and many of its people are up to their eyeballs in debt there isn’t a lot of cushion for an economic slowdown and so there isn’t a lot of tolerance for pain. Instead of taking the pain and working through the debt hangover, in a panic the government is now proposing we drink a new, credit-induced bailout to forget about our problems.
The cure for too much debt is not more debt. The cure for this problem is to free the markets, set a responsible monetary policy, and let the chips fall where they may. If we do not confront the problem now and deal with it like adults, the government’s actions will push us into a great depression, just like in 1929.
Devin Foley is director of development for Center of the American Experiment. |
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