By Douglas V. Gibbs
Once again, the Dow Industrial Average dipped below 10,000. Quickly, with manipulation by the bankers and government, the numbers recovered. The artificial stimulation through government stimulus and manipulation is getting ready to be exposed for the failure it is.
Our financial system, left to the free market, experiences drops and rises naturally. When the system is artificially controlled the drops are delayed, and are ultimately worsened. By next year the stock market will experience greater drops, and longer periods of lows. If the artificial manipulation by the government is not stopped, a crash is inevitable.
I am not predicting a crash within the next year, but the longer we continue along this path of tax, spend, and stimulus, the greater the likelihood the stock market will drop to record lows, and that it will take years, if not a decade or so, to recover.
Lowering spending, reducing the national debt, and dropping taxes are the only way to reduce the gap between revenues and expenses, and to allow the free market to flourish. And the sooner we take action, the better. The longer we wait, the more often we will see things like the Dow dropping below 10,000. And by next year, the stock market may not be able to rebound so easily, and may drop as low as 6,000.
Last year Vice President Biden said that we have to "spend money to keep from going bankrupt." Such is the mentality of the Left. And as they continue to spend and spend and spend, our economy is slowly worsening. The true damage is outside of our view, however. Spending more money to avoid bankruptcy is a bizarre technique, but nonetheless, the liberal left believes that spending incredible amounts of tax payer money, while taking more and more control over the private sector, will save us. In reality, it is sending us into a direction of becoming like Greece. And if we go too far, only a plan similar to Greece's austerity may save us from complete collapse.
What we are experiencing is the greatest Ponzi scheme ever created. Ponzi schemes are pyramid schemes that work on the "rob-Peter-to-pay-Paul" principle. As money from new investors is used to pay off earlier investors, a greater demand for new money is created, and eventually the whole scheme collapses upon itself.
Like Ponzi schemes, entitlement programs use redistribution to take money in from some, to pay the benefits of others. As long as enough tax payers pay into the program, the system appears to work. As the system damages the private sector, in order to keep up, the amount being payed by the remaining "rich" must increase. To accomplish such, the Left proclaims they must do so in order to "pay their fair share," even though over 90% of the taxes are already being paid by the people who are considered to be achievers. Such schemes are not sustainable. As soon as the amount of benefits being paid out exceeds the amount of money coming in, the entire system collapses.
We are already there.
To try to solve the problem, the nation went off of the gold standard so that they could create fiat currency. Every nation on this planet now operates on fiat currency. Fiat currency has no value backing it up, and only holds any value as long as holders of the currency has faith in the government that issued the money.
As the tax and spend policies proceed, and the dollar steadily decreases in value because of the increase of money without value backing it in the system, the American People are losing faith in the dollar. One of the results of such a loss in confidence is what we are beginning to see in the stock market. The purchasing power of the dollar is in steady decline, and is slowly becoming essentially worthless. Such a drastic increase in the money supply through government stimulus programs is leading us in the direction of hyperinflation, and a collapse of our economy could follow.
Fiat currency is a crisis, unless the increase of money in the system without value attached is diminished, and unless our system begins to be operated on sound economic principles. This would mean cutting spending drastically. This would mean government letting go of their control over the system, cutting back on excessive regulations, and creating a positive environment that includes a cut in taxes so that businesses and individuals can keep more of what they make. Creating such an environment would enable the participants in the free market to achieve, and allow the success of those willing to pursue achievement to jump start the economy, creating jobs, and creating commerce.
But this must happen NOW. We are moving rapidly toward the line of no turning back, and we must stop the madness before we cross that line. Otherwise, our only salvation would be complete default, and a massive period of depression (of which we have already entered into).
Turning this around, and growing the economy, however, won't be enough. As the economy expands, government brings in more tax revenue, and then acts compelled to spend those monies on various programs, eventually encouraging the government to create a national debt and deficit spending. Expanding our gross domestic product does not gives us the allowance to spend more. It is all the more reason to continue to reduce government spending to levels that are within Constitutional authority. In other words, the federal government should only be involved with spending money on issues that are within their Constitutionally given powers.
The U.S. Constitution gives the federal government its authorities in Article I, Section 8, and in any subsequent amendments. The powers of the federal government are few, and directly connected to the protection, preservation, and promotion of the union. . . and nothing more.
Article I, Section 8 allows the federal government to tax (originally to tax the States, and foreign imports, not to tax the citizens directly with an income tax), to borrow money (as necessary, usually in the case of funding a war operation), to regulate commerce (by acting as a mediator to ensure that commerce flowed more easily, not to restrict and control commerce), to establish a uniform rule of naturalization (note that immigration is not mentioned there, and is only referred to in Article I, Section 9), to create uniform laws of bankruptcy (to ensure the citizens were treated equally in the States over this issue), Coin money (note that it did not authorize "reserve note" styles of currency), fix a standard of weights and measures (once again so that the union was preserved through uniformity), provide punishment for counterfeiting (if coining money and issuing securities was to be a federal power, then surely punishment for counterfeiting such would need to be a federal authority as well), to establish Post Offices and post roads (note that it allows for the federal government establishing post roads, but gives the federal government no more power over the roadways, i.e. building, maintaining, or funding), Patents and Copyrights (to promote the union, and protect the creativity and innovation of its citizens), create the lower federal courts, define and punish offenses on the high seas, declare war (executive branch is given the power to wage war, of which can be checked by Congress through the funding process), raise and support armies (for protection of the union), provide and maintain a navy (for protection of the union), create rules for the military forces, be able to call forth militias to protect the union from insurrections and repel invasions, create and maintain a government district that will be the seat of government (Washington DC), and to make laws necessary and proper to carry out their constitutional powers.
Article I, Section 9 also allows Congress to prohibit the import of slaves, and immigration, through legislation. (Section nine is a prohibitive article that primarily tells the federal government what it may not do).
Article 4, Section 4 requires the federal government to protect the States from invasion (by doing things like securing the border).
One will note that nowhere in the U.S. Constitution does it allow the federal government power over anything that has to do with the health care industry, transportation, to create a centralized bank or dictate to the banks how they do business, providing entitlement programs for the people who fail to achieve or live up to their personal responsibilities, and such. Also note that if any of those things are not prohibited to the States, according to the 10th Amendment, the States "do" have the authority over much of those issues.
My point is this. Until the federal government backs off, disassociates itself with issues it does not have the authority over, cuts spending, cuts taxes, and becomes the limited entity it was originally designed to be, we will continue to flounder economically, and be at the mercy of an ever-expanding federal government. . . that could become even more centralized than it is now, and ultimately could become tyrannical.
The line in the sand is here and now. The future of this nation depends on it being turned around immediately. Otherwise. . .
-- Political Pistachio Conservative News and Commentary
Article I, Section 9 also allows Congress to prohibit the import of slaves, and immigration, through legislation. (Section nine is a prohibitive article that primarily tells the federal government what it may not do).
Article 4, Section 4 requires the federal government to protect the States from invasion (by doing things like securing the border).
One will note that nowhere in the U.S. Constitution does it allow the federal government power over anything that has to do with the health care industry, transportation, to create a centralized bank or dictate to the banks how they do business, providing entitlement programs for the people who fail to achieve or live up to their personal responsibilities, and such. Also note that if any of those things are not prohibited to the States, according to the 10th Amendment, the States "do" have the authority over much of those issues.
My point is this. Until the federal government backs off, disassociates itself with issues it does not have the authority over, cuts spending, cuts taxes, and becomes the limited entity it was originally designed to be, we will continue to flounder economically, and be at the mercy of an ever-expanding federal government. . . that could become even more centralized than it is now, and ultimately could become tyrannical.
The line in the sand is here and now. The future of this nation depends on it being turned around immediately. Otherwise. . .
-- Political Pistachio Conservative News and Commentary
Dow closes below 10,000 amid investor concerns - Christian Science Monitor
Dow Jones Averages - Dow Jones Indexes
No comments:
Post a Comment