For years Americans continued to live in a phony bubble economy. What we do is borrow money from all around the world and we spend it mainly on products we import. As we were borrowing and spending we dissipated the worlds wealth. We blew up this phony bubble economy that was consumer spending and built up this phony service sector economy that can only exist as long as the world was willing to fund it. But ultimately this bubble burst, like all bubbles. The Ponzi Scheme and our economy function under the same principles that Bernie Madolf used to run his investment company. And ultimately all these things fail. The free market is finally trying to cure the economy of this disease that the government policy created.. . The real engine of economic growth is under-consumption because when you don’t consume you save, and when you save you can finance capital investments.
And capital investments lead to real economic growth and enhanced productivity and a rising standard of living. “ “In the USA we borrow and spend all this money we confuse reckless consumption with real economic growth because our GDP became increasing comprised of consumption and consumer spending and we counted that as growth. And we looked at rising stock and real estate prices which were bubbles and confused that with legitimate wealth creation, but there was no real wealth there. Now the market is purging itself of all those imbalances and the government is interfering with that process ……We need to reverse those policies. The government needs to shrink and spend less and the consumer needs to spend less money.”
“And one of the biggest consequences of this fiasco is that the free market is getting blamed for problems that were created by government. Ex-president Bush in his speech said “Wall street got drunk”. He was right. So did Main Street, the whole country got drunk. But what President Bush didn’t point out was where they got the alcohol. They got the alcohol from the Federal Reserve, from Alan Greenspan. He’s the one that lowered interest rates to nothing and left them there for several years and then raised them very slowly. And because of all this cheap money, Wall street speculated and speculated, Americans remodeled their homes and bought imported products and cars, all sorts of things. None of this would have happened, the subprime market, teaser rates and option Arms if it wasn’t for the Federal Reserve. “
“The biggest problem with the housing market was Fannie and Freddy, government created entities that created giant moral hazards by allowing the American citizen to borrow money with the US government as a co-signer. This is what enabled Americans to overpay for houses they couldn’t afford and allowed the creditors to loan money without consequences. Normally in a free market economy there is a counter-balance of fear. But the government intervention of the free market short circuits that leading to this reckless behavior. Now the politicians are using this crisis as an excuse to grow the government precisely when they should be shrinking it. And we run the risk of repeating all the mistakes of the 1930s creating another great depression except this time around its going to be an inflationary depression. “
“Many people think the depression was the result of Herbert Hoover didn’t do anything, he let the free market work and Roosevelt came along and saved us with a bunch of socialism. That’s not what happened. Hoover did exactly what Bush did. Hoover bailed out everybody he could. Hoover tried to set prices and wages and turned an economic downturn into the beginning of the Great Depression. “
“The rest of the world doesn’t have to continue to accumulate US dollars and US government dept that can never be repaid. As an American I can say the sooner the world stops enabling this process the sooner the American economy can rebuild by allowing this phony economy to collapse.”
“History does not entrust the care of freedom to the weak or timid.”~Dwight D. Eisenhower Copyright 2007-2010TALK CITIZEN ™ is a trademark of LobaTek Incorporated
