Part 1 “Government Stupidity”
I remember very clearly when the national debt topped the 6 trillion dollar mark. My son was about 18 months old, and I was coming out of the mental fog that clouds the judgment of young men. Having children tends to make you more aware of your decisions. It causes you to consider the course of your generation. It leads you to ponder the future, or whether there will be one. As the absurdly large number of 6 trillion dollars sank into my psyche, a phrase rang out in my head: “America is doomed. The great experiment has failed.”
That was around the year 2000. That was before 9/11, the Patriot Act, the endless wars, the faceless enemy, the NDAA, NSA expansion, George W. Bush, and even Barack H. Obama. I began to look in to buying precious metals and getting into a safe haven investments. Gold was only about $275.00 an ounce at the time. Great Britain had unloaded their vaults and pushed the price way down. I decided not to, however, and fell back under the spell of the prevailing wisdom. I bought a house. I ran with the herd. I didn’t get slaughtered in the housing collapse, but that wasn’t because of wisdom. Fuel prices surged if you remember in the year or so before the housing bubble popped. I, providentially, had bought a house too far from my job. When fuel prices soared I had to sell. It was pure dumb luck. I barely missed the butcher’s block. I should’ve listened to my gut. I should’ve bought gold.
Since that time the national debt has skyrocketed. So has the size of government. And the same goes for the supply of money. Real inflation is at almost a hyper-inflationary rate. I know that the Federal Government says that the inflation rate is less than 2%, but if you believe that, then you also probably believe that professional wrestling is real. We have printed between 4 and 5 trillion dollars over the last 6 years. It’s what Federal Reserve officials call, “Quantitative Easing. “ In point of fact, the term inflation simply means to increase or inflate the amount of currency in circulation. While politicians and bad economists believe inflation to be rising prices. Rising prices are actually caused by inflation. They are not inflation itself. Essentially, what we’ve been doing for the last 10 years is trying to print our way back into prosperity. Remember when George W. Bush sent you those extra tax refunds in 2004 and 2006, so you could go spend that money on clothes, T.V.’s, computers, and entertainment? Yep, they just printed a fresh batch of cash up. Remember when Mr. Bush had to, “abandon free market principles to save the free market system?” Well that was completely untrue. What he really did was, “increase government interference in the already government controlled market, in order to save the government controlled system.” He was curing a headache with a hammer. All he did was kick the can down the road and deepen the crisis.
In 2009, during Barack Obama’s first term, who did the government bail out? Fannie Mae, Freddie Mac, lenders that specialize in loans to un-credit worthy recipients (sub-prime), and the major banks who just happened to also be government bond purchasers. These are all either government owned entities, government regulated entities, or government debt partners. Who kept interest rates artificially low to make all those bad loans attractive? It wasn’t the free market. The banking system’s failure was caused by government intervention. It was bad central planning. F. A. Hayek’s prophetic phrase noting that trying to centrally plan an economy is, “The fatal conceit”, came reigning down on our collective heads.
Incidentally, do you want to know why fuel costs average almost 4 dollars a gallon in the U.S.? Not because big oil is fleecing us, but because the dollar has decreased in value. Your dollars buy less fuel. Oh, and don’t forget how the government refuses to allow refineries to be built in the U.S., which limits the supply of fuel we can make available, which causes artificial lack of supply, which in turn drives prices up and keeps them up. Want to get in to the energy business? Fat chance. Regulations, paper work, lawyers, bureaucrats, fees, taxes, these all await you. This crushes competition, keeps small businesses out, and prices up. Same goes for all your energy needs like electricity and natural gas. The purchasing power of the dollar is decreased, and therefore it buys less, because of the government. Your cost of living is increased, making energy even less affordable, by the government?
Healthcare costs going up? There’s a sector that the government is not involved in… right? They just nationalized 1/6th of our economy in the Affordable Care Act. Who is going to direct your care now? The government. Who is going to choose your doctor? The government. Who is going to raise taxes on medical devices? The government. Who is going to destroy healthcare in America, stifle innovation, and cause the death of sick and elderly people by delaying care and erecting death panels? You got it, the government. Don’t believe me? Ask veterans. If the government can’t manage the Veterans Administration, which is miniscule in comparison to the entire Healthcare Industry as a whole, why in the world would we hand the reigns over to the whole industry?
We could do this all day. Pharmaceutical costs increasing? The Food and Drug Administration delay life saving medication coming to the market by years, costing an untold amount of lives. They drive up the cost of bringing new drugs to the market by billions, locking out small business, and driving up the cost of the drugs exponentially. The FDA is a government agency the last time I checked. Food costs going up? The FDA rears its ugly head again, along with The Federal Reserve, as well as the Environmental Protection Agency. Want to grow organic food? You’ve got to be government certified. Want to sell raw milk to your neighbor next door. No way, pour it out, the government says you can’t do that. Want to sell homemade canned goods? Nope, you’ve got to get a government permit, have your kitchen inspected, and likely remodeled to comply with whose standards? The government. The free market is a myth, a unicorn, the Lochness Monster. It’s like bigfoot. People claim to have seen it, but I can’t find a carcass, or get clear video footage of it. Government officials make speeches on talk shows about how the free market has failed, but by my observation it was hunted down, tackled from behind, and choked out by government. Basically, my point is this: if we are doomed, it is powerful, intrusive, centralized government that is the cause, not the free market. But thank goodness that there is a sector of our economy that the government could not figure out how to regulate over the last decade, and so it remained free to develop without interference. That sector is the Internet and technology sector. While government was destroying other parts of our economic system, the technology sector was thriving, creating jobs, and blooming into an economic engine that likely staved off, not just a national depression, but a global one.