Sunday, September 11, 2011

Rebuttal: Republicans Vs. Economics

Rebutting: Republicans Vs. Economics by

As clear logical thinking people, we must transcend the notion that a good idea has to be wrapped in a blue or red package. We cannot move forward as a species if we can’t break free of the paradigm and defeat the duopoly that confines and defines our school of thought. The only thing that can come from this is spiteful narrow minded results that makes its bed in blissful denial. I am not, by definition, a republican, libertarian or a democrat. I am an iconoclast of sorts.

Now for the rebuttal.

Although your entry was well planned out and was an overall good read, it was also partisan to a fault. That is, it rallies to the blue team to such an extent that it denies your readers of obvious truths. The reality is that neither side would have stopped the default, nor would they have turned the economy around. The problem is Keynesian economics as a whole.

The economic bubble has been forming for years due to the quantitative easing efforts of Alan Greenspan as he forced interest rates down. Quantitative Easing is when the central bank (the Federal Reserve), buys up financial assets to inject our fiat currency into our cash pool. (Quantitative Easing Explained

Obama’s Stimulus Packages are an extreme form of Quantitative Easing, where the government simply injects an exorbitantly large amount of fiat money into the economy. To some that sounds like a good thing, more money = more prosperity, right? Unfortunately this isn’t how it works, for every dollar the fed injects our total money supply is devalued by that amount. So essentially there is no gain, just a huge loss of value.

So, despite your arbitrary praise of the Democratic Party and despite the other “team” blaming Obama for the collapse. This was doomed to happen regardless of who was in office due to the poor economic policy of “central economic planning”. What caused this was the long-term ritual of devaluing the dollar. 

Now here’s a hard truth about Obama’s economic policy and stimulus. In 1971 gold was $38 an ounce, this is when we went off the gold standard. 37 years later, just before Obama took office (2008) gold was $737 an ounce. Now, just 3.5 years later, due to Obama’s immense stimulus, gold is at $1895 an ounce.

Take that in. Set aside all bias and partisanship and look at the situation logically. In 3.5 years under Obama’s administration gold went up by $1158, whereas in the previous 37 years it only raised a mere $699. Ask yourself has Obama’s stimulus really helped? I think the answer is obvious and to ignore this is just an act of pure partisan denial.

Let me briefly explain why raising taxes in a recession would only hurt the economy, this is simple, undeniable logic... Let’s say the average paycheck is $500.00/week (gross) and after 29% taxes the take home is $355.00/week. Let’s also say this person’s bills are $275.00/week. That leaves him with a spending limit of $80 per week. So at the end of the week this individual has $80 to essentially pump into the local economy. Now let’s raise taxes on this person to say 34%. Now that changes his take home from $355 to $330/week, thus reducing his additional spending cash to $55/week. Now, is this person more likely to go out and spend money or less likely? $25 isn’t much of a difference but extrapolate that by 300,000,000. That damages true economic growth substantially.

I would just like to clarify, that the notion that the money still exists within our government and that the government will still use this money in an effective way is just senseless. There has been no solid evidence of fiscal responsibility in the past as our government has been seen on countless occasions throwing money to the wind. An individual spending his money on what he/she wants is what determines the market. The government can manipulate the market with our tax dollars to an extent but it usually creates a false sense of prosperity for “choice companies” and thus, doesn’t last as we can tell from recent history.

I am curious to know if you actually know anyone who owns a small business and how hard it is for them to function with the heavy taxes and regulations that they succumb to. Do you really believe that deregulating and shrinking the federal register will actually hurt the economy? If so, please explain. 

I’d like to loosely quote the founder of Home Depot (who obviously knows a few things about running a successful business) as saying, “I don’t believe the miracle of Home Depot could be repeated in this day and age due to the current regulatory system”. But what does he know, he’s only made 1,000 millionaires in his day.

Regarding your comment: 

Mark Zandi, the Moody's chief economist who was John McCain's economic adviser, judged that the Obama stimulus passed in 2009 kept unemployment from rising two percentage points higher. He says that the president's new proposal would boost GDP by 2 percent and reduce unemployment by 1.9 million jobs.”
First the evidence of this is theoretical as one cannot see into the future, only assume projections of what they believe, or would lead you to believe, to rally support. So, I contest that if Obama hadn’t injected the money that our recession would almost be over. Instead, at this rate and with your mentality, we will be in a recession for the next 10 years. The injection of money into our economy simply gave us a false sense of prosperity. I know this because several noted economists predicted the collapse of these bubbles in 2002. They also predicted what would happen if the stimulus package went through. 

If you could Jacob Weisberg, would you please produce a link to an article of ANY Democrat leader who had actually predicted and warned us about the collapse of our economy? That was a loaded question, as I know that there weren’t any. The only public figures who were documented as seeing the collapse were Peter Schiff, Ron Paul and Gerald Celente. (videos)

I don’t believe that Obama is a stupid person economically speaking, I believe he has a motive behind crashing the economy. But that is a topic for another blog.

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