Sunday, August 15, 2010

Would Our Economy Be Better Off If They'd Done Nothing?

Consider the title question. Seriously. The president and all Democrats are running around telling us how bad our economy would have been if they hadn't taken the steps they took. But there are three very big problems with that statement.

First and foremost you can't prove a negative. You cannot prove that what you did NOT do would have been worse OR better! Likewise, there's no way to prove what you did was the best or only solution. In fact, when what you chose to do didn't do what you thought ... didn't help or made it worse, doesn't that strongly suggest there was probably a better way that you didn't try? (Such as lower taxes and less spending?)

Second but equally important is the fact that our economy is and always has been very resilient. Throughout our history, when it has been left free of interference, our economy has thrived. If you examine all troubles in our economic history you'll see that some 'event' caused each problem. The very nature of our economy suggests it will and has self-corrected. True enough, it helps to take some emergency measure sometimes to stop the bleeding but after that, our economy has remarkable self-healing capabilities. This suggests that such extraordinary infusions of government help probably wan't even necessary beyond the first action to save the financial industry. If businesses had been left alone so they knew what to expect in the way of new taxes and government controls they would have been more willing to invest in the recovery rather than waiting to find out what government is going to do ... or going to screw up.

Third, there is the undeniable reality that reducing taxes and the size and cost of government, done together, are very, very stimulative. Government revenue has ALWAYS increased. (Congress' mistake sometimes was then going off and spending too much.) One can point to times when tax cuts didn't result in good enough economic growth but in all those cases the slow growth was caused by excessive government spending that sucked the life-blood out of small businesses and reduced citizens' ability to buy 'stuff'. When our country has done either (reduce taxes OR reduce the size of government) the economy grew in a healthy way. It's only when we've reduced one and increased the other that it didn't help.

Democrats have no basis whatsoever on which to claim their policies avoided a depression or even started a recovery. However, based on actual history AND basic economics(!), one can reasonably argue that if they had left the economy alone and not plunged us so far into debt or increased government growth and regulation, small businesses most likely would have done better than they've done this time. Is it completely unreasonable to argue that if Dems had not gone spend-crazy, debt-crazy or government (and regulation) growth crazy the economy just might have done better? Of course not! Actual facts of what has happened relative to promises attest to something not right! In fact, doesn't the fact that our economy has been stagnant ever since Obama came into office suggest that his policies did NOT work? Don't results (actually lack of them!) strongly suggest that he didn't know what he was talking about during his campaign (about how successful his fixes would be). Doesn't it also suggest that he's not telling us the truth now by suggesting the economy is getting better and that he fixed it when neither is clearly not true?

These are clearly people running the country now who think that if they say something loud enough and long enough people will believe them even though anyone with common sense can see it's not true. (Sounds like the Saul Alinsky approach does it not?)

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