The Perils of Economic Ignorance

Discussion in 'Politics' started by KenH, Mar 26, 2006.

  1. KenH

    KenH
    Expand Collapse
    Active Member

    Joined:
    May 18, 2002
    Messages:
    32,485
    Likes Received:
    0
    The Perils of Economic Ignorance
    By Congressman Ron Paul

    March 27, 2006

    Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we've created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world's reserve currency ends. It's a sobering thought, but a choice must be made.

    How did this happen? How did we get to such a state? The answer is found in the nature of politics itself. The truth is that many politicians and voters essentially believe in a free lunch. They believe in a free lunch because they don't understand basic economics, and therefore assume government can spend us into prosperity. This is the fallacy that pervades American politics today.

    I believe one of the greatest threats facing this nation is the willful economic ignorance of the political class. Many of our elected officials at every level have no understanding of economics whatsoever, yet they wield tremendous power over our economy through taxes, regulations, and countless other costs associated with government. They spend your money with little or no thought given to the economic consequences of their actions. It is indeed a tribute to the American entrepreneurial spirit that we have enjoyed such prosperity over the decades; clearly it is in spite of government policies rather than because of them.

    I certainly have seen firsthand a great deal of economic ignorance in Congress over the years. Few members pay any attention whatsoever to the Federal Reserve Bank, despite the tremendous impact Fed policy has on their constituents. Even many members of the banking and finance committees have little or no knowledge of monetary policy. Perhaps this is why so many in Congress seem to believe we can all become rich by printing new dollars, or that we can make 2+2=5 by taking money from some people and giving it to others.

    We cannot suspend the laws of economics or the principles of human action any more than we can suspend the laws of physics. Yet this is precisely what Congress attempts to do time and time again, no matter how many times history proves them wrong or economists easily demonstrate the harms caused by a certain policy.

    I strongly recommend that every American acquire some basic knowledge of economics, monetary policy, and the intersection of politics with the economy. No formal classroom is required; a desire to read and learn will suffice. There are countless important books to consider, but the following are an excellent starting point: The Law by Frederic Bastiat; Economics in One Lesson by Henry Hazlitt; What has Government Done to our Money? by Murray Rothbard; The Road to Serfdom by Friedrich Hayek; and Economics for Real People by Gene Callahan.

    If you simply read and comprehend these relatively short texts, you will know far more than most educated people about economics and government. You certainly will develop a far greater understanding of how supposedly benevolent government policies destroy prosperity. If you care about the future of this country, arm yourself with knowledge and fight back against economic ignorance. We disregard economics and history at our own peril.

    - LINK
     
  2. Vasco

    Vasco
    Expand Collapse
    New Member

    Joined:
    Sep 8, 2002
    Messages:
    131
    Likes Received:
    0
    wow thanks for an excellent article.. the authors he mentions at the end are form an economic school of thought known as "austrian economics" the mises insitute has alot of those auhtors texts, and look up bastiat "broken window fallacy".. hazlitts economics in one easy lesson is availabe free online, just google it and you should find it..
     
  3. KenH

    KenH
    Expand Collapse
    Active Member

    Joined:
    May 18, 2002
    Messages:
    32,485
    Likes Received:
    0
  4. Vasco

    Vasco
    Expand Collapse
    New Member

    Joined:
    Sep 8, 2002
    Messages:
    131
    Likes Received:
    0
  5. LoveThyNeighbour

    LoveThyNeighbour
    Expand Collapse
    New Member

    Joined:
    Aug 1, 2004
    Messages:
    44
    Likes Received:
    0
    If you concerned about the health of the US economy, then how about this: Ask big business or any economist and they will tell you about the necessity for immigration. With an aging workforce immigration is essentail if we are to avoid the pension crisises facing low-immigration countrys like Germany now.

    Immigrants are a necessity for the US economy (ask ANY economist worth his salt), the US was built on immigration and the concept that if you work hard then 'the laborer is worthy of his reward' And immigrants work the longest hours, in the worst jobs to provide their familys with hope.


    "America is a stronger and better nation because of the hard work and the faith and entrepreneurial spirit of immigrants.... Our country has always benefited from the dreams that others have brought here. By working hard for a better life, immigrants contribute to the life of our nation." President George W. Bush, Jan. 7, 2004

    ----------------------

    all the best
    Julian
    <><
     
  6. KenH

    KenH
    Expand Collapse
    Active Member

    Joined:
    May 18, 2002
    Messages:
    32,485
    Likes Received:
    0
    I have no problem with legal immigration.
     
  7. TomVols

    TomVols
    Expand Collapse
    Administrator
    Administrator

    Joined:
    Oct 30, 2000
    Messages:
    11,170
    Likes Received:
    0
    Virtually no one has learned economics, and it's the bane of our society.
     
  8. LoveThyNeighbour

    LoveThyNeighbour
    Expand Collapse
    New Member

    Joined:
    Aug 1, 2004
    Messages:
    44
    Likes Received:
    0
    I study econmics and politics at Oxford university, BTW

    anyhow i agree legal immigration is the right way (so they can pay taxes etc.), the troble is the quotas for legal immigration and the bureacracy of the application process, means businesss don't get the supply they need from legal sources only, hence their willingnesss to employ illegals.

    solution = allow larger legal immigration quotas.

    They wanna come (supply), business wants them (demand) --> why not allow more of them to come in legally, that way they could pay taxes, be monitored for criminal activity, and be tested for HIV etc.
     
  9. poncho

    poncho
    Expand Collapse
    Banned

    Joined:
    Mar 30, 2004
    Messages:
    19,657
    Likes Received:
    128
    Business wants them because they'll work cheaper and help drive down everyone elses wages which = more profit for business. Increase the supply of cheap labor and you decrease the demand for higher wages.
     
  10. lomax

    lomax
    Expand Collapse
    New Member

    Joined:
    Mar 27, 2006
    Messages:
    54
    Likes Received:
    0
    Our government also disreguards the heritage of the American people. Our ancestors left trails of blood in the snow at Valley Forge because they fought for America without shoes in the freezing
    cold weather. They had no provisions-only the desire to form a country for their offspring free of religious persecution and tyranny.

    Yet this love for God and freedom is what made them prevail against a technologically better army with shoes, warm coats and supplies.

    Our Constitution is written in their blood and later became the basis for America's greatest treasure-Americans. For the government to
    sell us out and disreguard the sacrifices made to form this country is treason not only against America, but God too.

    The government might escape these sins while on Earth. But escaping from God is another story. Clearly, He has also been betrayed and sold-
    out by greedy politicians, business leaders
    and some in the clergy.
     
  11. LadyEagle

    LadyEagle
    Expand Collapse
    <b>Moderator</b> <img src =/israel.gif>
    Moderator

    Joined:
    Feb 7, 2002
    Messages:
    22,028
    Likes Received:
    1
    That sounds good in textbooks. However....

    The quota number set for the amount of legal immigrants is based on a number of factors including what society, economy, resources, etc. can bear.

    The premise that "quotas for legal immigration and the bureacracy of the application process, means businesss don't get the supply they need from legal sources only," is a false premise. One can only draw that conclusion if there is no one in the host country that is unemployed. The fact is NOT that there aren't enough Americans / legal immigrants to fulfill the demand for workers, but that these employers who are hiring illegals are doing so in order to evade our minimum wage laws and to pay as low wages as they can pay so as to increase their bottom line. It's called GREED.
     
  12. poncho

    poncho
    Expand Collapse
    Banned

    Joined:
    Mar 30, 2004
    Messages:
    19,657
    Likes Received:
    128
    Those textbooks were most likely written by liberals and made possible by grants from big business and foundations that profit from cheap labor and low wages.
     
  13. North Carolina Tentmaker

    North Carolina Tentmaker
    Expand Collapse
    New Member

    Joined:
    Sep 19, 2003
    Messages:
    2,355
    Likes Received:
    0
    Poncho is right when he says:
    I am sick of hearing how there are jobs that Americans just won't do. That is just not true, if the price is right we will do about anything. We are not as lazy as we are greedy.

    Do you want someone to pick cabbages for 12 hours a day? Most of us probably would not do it for $5.25. But what if it was $15.25? How about $35.25? You would have more agricultural workers than you could stand.

    Of course that leads us to the question of how that changes the cost of produce and the economic viability of cabbage farming operations. Eventualy the entire cabbage industry moves offshore and we start buying all of our cabbages from Mexico or China. Before you know it the entire American farming systetm is bankrupt and we can no longer feed ourselves. That is exactly what we have done and are doing with textiles, steel, and automobiles.

    A reliable supply of cheap labor does not necessarily mean more profit for big business. In many cases it means American businesses can remain profitable in a global economy.

    Don't read that to imply I am in favor of illegal immigration, I am not. What we need is a liberal, legal guest worker system that is regulated and taxed.
     

Share This Page

Loading...