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Old 07-20-2011, 11:27 PM
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alamostation alamostation is offline
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Join Date: Jul 2007
Location: Port Lavaca
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The economy, theories and how we got here. What is your view?

To me, the trouble with arguing economic theory is that none of them have been fully tested in real life. I'll give my views so you can flame me all to Hell.

Marxism/communism: It has a fundimental flaw, it teaches that there is no religion. The concept "of from of his ability to each according to his need" without a moral basis does not work. Human nature takes over. Everyone tries to have less ability and more need. We have seen this in the early Soviet Union, early Communist China and Cambodia under Pol Pot. The result is the creation of a ruling elite who decides that there are groups holding out their abilities or production. The elite order the deaths of millions of people accused of resisting communism. With a religious basis, communism works pretty well. The Amish ask no help from others and help each other to the best of their abilities. Their society works better than most.

Capitalism: Without a strong government it might work. It worked for a few years in colonial America, for a few years in early America, early Austrailia, every prison, and every country with a black market in the last century. It is a system where each party to a transaction receives the full benefit of their transaction. As De' Tocqueville pointed out, the US system will collapse when the government can take money from one group and give it to another. When the government can be bought, capitalism no longer exists. We have not seen pure capitalism/free enterprise in the US for 200 years.

Keynesian economics: If only. The basic principle is solid. In times of economic downturn, allow a Federal debt to boost the economy and the increase in revenue will produce a future surplus. The problem is that the programs created to boost the economy didn't go away when the economy recoverd, instead they grew like Topsy. If the economy boosting programs went away, there would be a budget surplus. Instead, the government had no huevos to cut budgets and racked up deficits in boom times.

Friedman economics: If only. The basic principle is solid. Let the free market determine values. The government can't let it happen. It has to have its finger in the pot. Without Fannie Mae and Freddie Mae providing guarantees for sub-prime loaners, would we have suffered a housing bubble? Barney Frank boosted the bubble and GB2 rode his pony. Both parties are to blame for the housing collapse.

Socialism: government ownership of factories and farms. Exemplified by the post-Lenin Soviet Union. Exemplified by shoddy manufacturing and food shortages.

The trouble now is that we really need to follow Keynesian economics and increase the deficit, but we have called wolf too many times in the past for this to work. Instead, China and our other creditors want us to reduce the deficit.

As much as the Libertarian me is against government spending and taxes, I have to say it is time for the government to spend and enact a tax increase for those above $100,000 income and elimination of all overseas corporate deductions.

Secondary question. Where would we be if instead of giving the TARP banks their bailout, for the same price we gave person in the US $3000? I think it would be boom times for the average citizen and hard times for the people that caused the problems.
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