With the proposal of yet another “stimulus” package—totaling $825 billion in handouts—President-elect Barack Obama and the Democratic Congress clearly have abandoned any hope that through the application of market forces—and American entrepreneurial ingenuity—the U.S. economy can recover.
Never mind that the government has ducked any responsibility for creating the current mess. Or that it has failed to enact—or even propose—reforming and repealing the very policies that caused the financial system to crack in the first place: too much credit, too low interest rates, regulations by government to force banks to give out loans that ultimately could not be repaid… ad infinitum, ad nausea.
Beneath this abdication of accountability is a complete lack of faith by politicians in the very people they represent. And, of course, in the American spirit of free enterprise.
Instead, and in its place, is their obtuse adherence to creating yet more government dependency. Underpinning the so-called “stimulus” package—which will only stimulate the national debt and skyrocketing inflation—is the principle that it is the public treasury that creates wealth, and not the productive capacities of the American people.
The unprecedented increases in public spending and financial commitments by the government that have been in enacted in 2008—some $10 trillion should this “stimulus” plan pass—are not based on any increase in revenues to the Treasury. They are based on a desire by politicians to exacerbate the self-same economic policies that caused the crisis to begin with.
Pause for a moment and think it through. Because this truly is unprecedented. Never before has there been such a radical, massive expansion of the financial obligations of the government—and thus the American taxpayer. If it fails, as ALG News has reported, the U.S. will be bankrupt. The resulting inflation will make Zimbabwe and the Weimar Republic look like mere blips on the economic screen. And foreign nations will have no alternative but to abandon the dollar as the debris of history.
But there is another way. Other paths that the nation might take. Other roads that do not lead the American taxpayer to be shackled to an Everest of debt.
It was not government that invented the steam engine that powered factories and mills, locomotives and steam boats; it was the individual initiative of several engineers over the course of hundreds of years, including James Watt and Richard Trevithick. Nor was it government that forever revolutionized the process of making cars—and just about everything else that is manufactured; it was the initiative of Henry Ford and his assembly line that created millions of jobs and made the 20th Century the era of the automobile. And again it was not government that transformed and made more efficient the use of computers; it was independent innovators like Steve Jobs and Bill Gates.
These and countless other captains of industry are the true creators of wealth and opportunity. Not a bloated, moribund Big Government that does not even consider tapping this resourcefulness.
Instead, quite simply, government should have faith—and get out of the way of—the engine of the American economy. It should clear the path to economic growth. It should reduce the tax burden across-the-board. Slash the federal budget and reduce the burden that government poses on the economy. And it should restore sound principles of monetary policy.
The straightforward applications of these principles would place the responsibility for achieving prosperity back where it belongs—in the hands of each individual American.
Real wealth is created by the individual—by true captains of industry—who invents something of value that people want, need, and desire. Not by a government printing press and complex financial instruments that enable the state to spend far beyond its means. It is generated by aspiring entrepreneurs who need to expand in order to get their goods and services into the hands of consumers. Not by make-work government programs spinning off dead-end jobs.
That wealth destruction has occurred, and unemployment is rising, is a testament to the failure of the very policies now being proposed to “stimulate” economic growth. And it is now being deepened daily by a complete lack of faith by politicians in individuals and free enterprise. They have abandoned hope in the American dream. And their nightmare scenario is only beginning to unfold.
Robert Romano is the Editor of ALG News Bureau.
