One Housewife's Opinion

Could it be, Keynes was WRONG?  Empirically, his theories have not been proving out very well. Not nearly as well as the Laffer Curve, which show an INVERSE relationship between tax rates and treasury revenue. Historically it worked for John F. Kennedy, it worked for Ronald Reagan, it even worked for the “Former Occupant of the Oval Office, 1993-2001”, though that last was an unwilling participant. And it worked again for George W. Bush. Time will tell.

 

WE CAN'T SPEND OUR WAY OUT OF THIS ONE -- KEYNES WAS WRONG!


http://www.janereinheimer.com

February 11, 2009 | Jane Reinheimer


The fact that we have so many oversight committees in business and in congress says to me that there's a serious deficit of honest people around my tax dollars.

And even with all those oversight committees, how come there's so much crookery that people still manage to get away with? Maybe, perhaps, do you suppose that the oversight committees have the same kind of camaraderie going on that they're supposed to be eliminating?

Just asking.

And then, the thought filled me with wonder about whether the DOW would have gone through the roof if there had been this adamancy about curtailing spending?

I mean, what if the White House had said something like, "Give me budget revisions that cut expenses by at least $1 trillion and get it on my desk in the next week or two."

Well, that's not gonna happen. And you can bet that the Senate wouldn't have stayed late on a Saturday night to hammer out a compromise bill to send back to a conference committee.

Nosirree bob. The liberals run their economic theories up the John Maynard Keynes flagpole. Keynes (pronounced Cainz) strongly preached about the need for government to spend its way out of recessions and depressions.

The conservatives lean toward Adam Smith. Smith believed that the free market would correct itself, if left to its own devices. Smith would probably be horrified to see all this tinkering with Wall Street that's going on right now.

So, basically, I've just defined one of the big differences between liberals and conservatives; between Democrats and Republicans.

This pork barrel bill that's being considered right now has a proviso that will mandate medical records to go into a national data base. That's okay if you don't mind other people knowing your medical diagnoses. If you're against such things, then you ought to know that your medical history privacy is about to become a thing of the past.

And please don't tell me that it's okay with you if other doctors have access to your medical "secrets," like maybe impotence, or if you've ever had an abortion, or if you had an STD that you don't want your wife's gynecologist to know about, or any other secret that you don't want spread around.

Or how about an insurance company tapping into your medical records and if you have something back there in your medical history that might be too expensive to treat, you could find yourself turned down for coverage.

Or how about if you're taking medication to help you quit smoking and you go for a job interview that only wants non-smokers to apply. So you tell a little fib and say you no longer smoke. But you're still taking the medicine to help you quit. Do you think you'll get the job?

But here's the real kicker. You won't know all the people who have access to your medical records. What if the nurse who works in your doctor's office goes to your church and you'd just as soon she didn't know that you may have been hospitalized for a mental disorder ten years ago. Something you've long since worked through. Even though she's bound by confidentiality, do you think she's never ever going to (snicker snicker) share any of that information with anybody else outside the office?

This spending bill contains a $50 billion price tag for developing a national medical info program. Kiss your medical secrets goodbye. And what, pray tell, does your medical records have to do with stimulating the economy?

But back to Keynes versus Smith?

And why is this difference so important?

Well, under the Keynesian proposals, we've seen the DOW drop just since the regime change in the White House from a pre-election 10,831.07 on October 2, 2008 to 8,696 on November 6, 2008 to 7,879 at this moment as I type.

So what's the big deal about the DOW?

Simple. If we are going to have companies that continue to provide jobs in the private sector, then corporations need to be able to raise money. One of the ways they do this on the stock market. The DOW is a bench mark of how companies are doing.

When the DOW is down, corporations aren't able to raise capital to keep running. When they can't do that, then they start laying off employees. When they lay off employees, those are people who are not working and therefore not paying income taxes. And when people aren't paying income taxes, then the government can't collect taxes it needs for programs.

Voters have voted and decided that this is the time for Keynes economic theories to run the country.

Never mind that the DOW had been sailing along at 11,000. Now it's headed down still more. Spending more money on government programs is not going to "cure" the financial headaches that are out there. Eventually the economy will grind to a halt when enough people can't find jobs and unemployment gets high enough.

Printing more rubber money is not the answer. Where is the money coming from to cover the debt we're running up?

Hopefully there are other countries that will buy U.S. treasury notes. And which country on this whole planet has enough money to do that? China. But China recently announced that they weren't going to buy any more of our treasuries.

Now what will we do?

Well, here's a clue. Yesterday, our treasurer said he was going to help the banks out some more. He's not sure it's going to work. In fact, his solutions may need a bit more tinkering, but he's got a plan. Somewhat.

Yeah, right. And while he was at the podium, the DOW sank another $389. How was that for a vote of confidence?

It wasn't that long when the DOW closed at an all-time high of 14,000! Didn't stay there very long. In fact, it started tumbling pretty quickly when it became obvious that the liberals, the Keynesians, were headed to Washington for this regime change.

It won't matter to you if you don't need your IRA or your 401(k). It won't matter to you if you don't need a job. If you don't need those things, then Keynes is your guy.

And never mind that the White House is saying that it inherited this financial mess. Truth is, the liberals have had control of both houses of congress since the 2006 election.

Then Obama sarcastically says to the media, "Everybody is an economist."

Well, I'm not an economist. I'm a housewife and I have to balance my budget at home. It would be a good idea if congress did the same thing. They need to work some overtime to balance the federal budget. Approach it with the same gusto that they did when they put this pork barrel boondoggle of a trillion dollar spending bill together.

That's how you get the DOW back to where it used to be before the Keynes flag started flying.

Josie06 Josie06
56-60, F
2 Responses Feb 11, 2009

Fabulous post!

I hear you and agree.