Saturday, January 17, 2004

Possible Reason for Economic Stagnation
By Alexander Marriott January 17, 2004

There has been much uninformed talk of economics lately as the eight Democrats vying for their party’s presidential nomination run around Iowa and New Hampshire crying about how jobs aren’t been created in the economic recovery and that the recovery in general isn’t going fast enough, despite GDP growth of over 8% recently. Some of that is no doubt due to inflation since the Federal Reserve is printing money like it’s going out of style, but there are other reasons why the economy is taking longer to recover and why jobs aren’t part of the equation.

Task one is to forget and ignore anything you may have heard from any of these eight dingbats. It was only last Sunday that Meet the Press’s Tim Russert passed up an unbelievably dumb comment from Sen. John Kerry to the effect that production in the economy was irrelevant and that jobs were all that mattered. If production were eliminated what would anyone be hired to do?

Task two is to realize that despite the tax cuts the President has engineered and gotten through congress he has not deregulated anything. In fact he imposed an onerous new level of regulations on CEO’s to sign on to the full accuracy of their companies financial statements, or face jail time. Regulations are just as hurtful as taxes and they continue to multiply ad infinitum.

Task three is to remember that the Federal Government isn’t the only government is the country. Fifty separate states within our country make their own policy regarding their own economies. Some have been wisely governed with reductions in government spending and no tax increases, personal, property, or business. But some states have not been so well led, Nevada being one of the not so fortunate. The Nevada State government decided that instead of cutting welfare programs which are a moral abomination upon the productive people of the state, they would raise business taxes to have their cake and eat it too. In such a situation hiring more people, which now costs much more money, is impracticable.

Ultimately, it is the atmosphere the governments in this country create, is it one that encourages and rewards producers with security in knowing they’ll keep what they produce and not be demonized by the government and looted for everything they have and will have? Or is it one that treats them little better than servants, to take the blame for every possible economic downturn and to follow the very numerous and irrational regulations that bureaucrats pass in Washington and the fifty state capitals? Unfortunately, it seems that the country is taking up the mantle of the second option rather than the first. All this will do is ensure that the economy will slowly stagnate into oblivion, with ups and down but the ultimate course fixed downward.

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