Although I am at liberty to post as many videos from my subscriptions as I want to on my facebook account and this blog, most of the time it is not in my best interest to do so -- because I may annoy everyone to death and then get deleted as a friend! I prefer staying in touch. But because I want everyone to become familiar with my line of thought I thought I'd let everyone know some of the Youtube Channels that I'm subscribed to. I'm subscribed to 162, however a lot of those channels aren't active and less than half of all those channels are posted below.
Here's some nostalgia for ya. Since we are talking about public school it is only appropriate to bring up a show that I barely watched when I was younger, Recess.Watch Recess: School's Out.
Check out my previous post for an argument against public school bailouts.
Also, do you know someone who is going to college soon? Are you worried about the high price of college? Some schools ask for $11,000-$15,000 per semester, or per year. However, with the CollegePlus program, a Christian alternative to traditional college program, you can spend $11,000-$15,000 for all four years.
If you have been monitoring the "Currently Reading in ECON" section on the right side of the blog, then you will know that I've been reading Economics in One Lesson by Henry Hazlitt. It is an incredible and simple-to-understand book. After finishing the chapter on public works not too long ago, I either understand it completely, as evidenced by the argument to come, or I misunderstand it entirely. But a knowledge of Hazlitt, O' dear reader, is not necessary to understand this post. You don't even have to judge if I understand Hazlitt or not. All you have to do is assess my argument.
I've been wanting to write about this topic for sometime now, even before I knew that the public schools were financially unstable. Watch the 3-minute video below before reading the rest of the blog post.
There is an inherent irony in public school bailouts. According to Hazlitt, public works spending always burdens the taxpayer. His argument is rather quite obvious and hugely commonsensical. Think about "government spending." It always means "through taxes," or at least the tax burden falls on the American people. So if you want to increase government spending, sure go ahead, spend until you can't spend anymore. Just remember, all that is spent is "through taxes." Oh, and I mean your taxes (insert evil government bureaucrat laugh). Once again, the government activity is funded by the taxpayer. Government doesn't generate revenue the way private businesses do i.e. by selling products and trade. Instead, everything comes by taxes or inflation (which is a cruel form of taxation).
More relevant, however, is the fact that a public school bailout would steal jobs that would have been created by the private sector. Fear mongers often don't see this possibility. They only see the jobs lost and label it a catastrophe.
Neal McCluskey, a CATO institute blogger, provided this argument against fear mongers:
even cutting 300,000 public-school employees — the worst-case scenario – would hardly be the “catastrophe” people like U.S. Secretary of Arne Duncan say it would be. As I wrote, even that cut would only constitute a 4.8 percent reduction in the public K-12 workforce.
Here is the deception. Understand it so that you won't be deceived:
All the fear mongers see is the 300,000 jobs being lost. What they don't see is the 300,000 self-employed jobs that would be made possible. They don't see the self-employed tutors, the new home schools, the new private schools, or anything else that could be created in a time of restructuring. However, those with vision can see beyond the immediate effects. We can see the creative potential that will be cultivated in the time of restructuring.
Instead of showing the public schools as the failures that they are, people instead will prop up public schools because they think its "best for the teachers" and more importantly, in their minds, "best for the children." But how can a system that is a perennial disservice to children be "best" for them.
Here is an unworthy objection, "public school teachers will have to spend less, and if they join the private school system they will receive much lower salaries." If you thought that was flimsy and unconvincing, don't worry, it depressed me too. Unfortunately, worse objections come right out of the mouth of one of Obama's economic advisers, Christina Romer, whose obsession with Keynesian economic theory is sickening.
Because unemployed teachers have to cut back on spending, local businesses and overall economic activity suffer. And the costs of decreased learning time and support for students will be felt not just in the next year or two but will reduce our productivity for decades to come...
Furthermore, by preventing layoffs, we would save on unemployment insurance payments, food stamps and COBRA subsidies for health insurance, and we would maintain tax revenue.
So that's what it's all about! It's about maintaining spending. Keynesian economists believe that in order to get out of any kind of economic recession all you have to do is spend, spend, spend. Of course, this is wrong, wrong, wrong! While she is correct that "local businesses and overall economic activity will suffer", she pulls the wool over your eyes by what is not said, and by what she can't not foresee. That is, she can't foresee the new jobs that would have been created in a bailout's absence and a tax credit for parents to keep their own money.
Yes, Private school teachers may be paid less, but have you ever thought of public school teachers as overpaid for no good reason. The ethical question enters the conversation: Why should public school teachers be rewarded with higher pay and more benefits if they produce as worse product, in this case, dumber kids? (Ruminate on that one for a while.)
I have no doubt that children are important. It wasn't too long ago that I was a 4.0. GPA-earner in Elementary school, a 3.7 GPA earner in Middle School, and a 3.2-3.5-earner my first year in high school (my last year in a public school). For the first half of my educational career, I was a public school student. On the face of things, it would seem as though my success was evidence for the effectiveness of public schooling.
But something was different.
My mother, and family, rewarded me with things like science textbooks tailored for children, science kits, telescopes, bird books, Lego Mindstorms: Star Wars Droid Developer Kits, K'nex kits, and a host of other things to cultivate creativity and critical thinking at a young age. What is the point? Not only did my family invest in me outside of school, they also did what public schools fail to do - give individualized attention to a child.
The reason why I left public school my freshman year of high school was because of the bloated classrooms and the lack of attention and seriousness among my public school peers. I was even told that the next year classes had to be held outside in tents because the classrooms were so full. If the trends are still in place, then a laid off teacher can teach those extra students for a fee, in a facility of his or her choosing.
Granted, there are those public school teachers who go above and beyond the call of duty to give individualized attention to their students. However, these are not the everyday public school teacher. And from what I hear, even when public school teachers are anomalously committed to their students, they can't give the extra attention due to regulations on their time.
Taking taxpayer dollars to fund public schools takes away taxpayer dollars which could have gone to private schools, or home schools. Some home schools pay as low as as $0-$2500 per child, per year. Those are incredible savings when compared with public schools, which isn't free at all, burdens are put on tax payer, and annual fees are actually underestimated and understated. According to a recent Cato Institute Study, it is actually cheaper to go to private school than public school by at least $8,000 dollars in Washington, D.C.
In Washington D.C., where faulty calculation and reporting is the norm in public schools, officials estimated the average price per pupil at $17,572 a year. However, the true cost of education is actually $28,170 per pupil (61 percent more than what was stated). And keep in mind, this is $28,170 of taxpayer money; over $11,000 that the taxpayer doesn't know is being taken away from them.
Imagine a parent of a D.C. public school student who makes any salary - they are poor, middle class or rich - and wants to send their child to a private school. If they knew that $28,170 was being spent on public schools, they would ask for their money back and send it elsewhere. If they were really frugal, they would send their money to Archbishop Carroll, whose tuition in 2009-2010 cost $9,575. Or how about Dematha, whose tuition is $12,250 for 2010-2011. The parent would save $18,595 if they sent their child to Carroll; and they would save $15,920 if they sent their child to Dematha. There are only two schools that parents would still be priced out of if they were to receive all $28,170 back, and that is Sidwell Friends at $30,842 and Washington International at $28,465. But they would still be able to afford the Potomac School ($27,925), Georgetown Prep ($25,650), Stone Ridge ($22,420), and Georgetown Visitation Prep ($21,500).
There is a proposed a solution for the tax payer - allow taxpayers to receive a credit to support private school education or keep the money in their own pockets. If parents of the public school system knew that public school actually costs more than private and home schools, and that public schools average $28,000 year in their own dollars, then they would leap at the opportunity to save money and receive a better education. After all, who couldn't use an extra $11,000? A tax credit of that size could also fund a lot of low cost colleges, or fund a new education business.
Some final points to consider:
Fear mongers want to preserve "teacher jobs" for the sake of "preserving jobs." But that is a fallacy in itself, which can be discussed later, and is easily undercut by the fact that more efficient jobs can replace them.
Those more efficient jobs would be products of the creativity adaptive to the needs of the immediate environment, instead of the one size fits all public school monopoly.
Finally, $23 billion is a lot of money. Since when is a billion dollars (let alone $23 billion) chump change? I'm not a big fan of Ann Coulter, but she got it right when satirizing Democrats by saying something to the effect of: "Billions...I mean millions is sooo 90's." In other words, the standards have changed - and to our detriment. A billion is still a million millions, and a million millions that we don't have.
To support public school bailouts is to support corruption and faulty government math; it is to perpetuate a failed system; and it is to block the creative and adaptive forces that would help reform education which would otherwise be unleashed in a free society.
Can we please, please, stop fear mongering! Can we please stop the appeals to our emotions! And can we please, please, stop supporting the bailouts!
For a free book on the history of education click here.
For the Cato blog post that prompted the writing of this blog post, click here.
Dan Mitchell Arguing against Stimulus Jobs back in 2009
This movie looks like it will be potent, perhaps with much better quality than any of the movies I posted in the previous post. Here's the story:
In times of crisis people seek strong leaders and simple solutions. But what happens when their solutions are identical to the mistakes that caused the very crisis?
'Overdose' is the story of the greatest economic crisis of our age - the one that awaits us.
The documentary traces the origins of the financial crisis and explores the eerie similarities with today's situation, where states like Greece, Iceland and even the U.S. seems to be in danger of collapsing.
Among those interviewed are experts who were mocked when they predicted the current crisis. Other interviewees include Nobel laureate Vernon Smith and former US Comptroller General David Walker (I.O.U.S.A).
Some of those people who were ignored and mocked are Peter Schiff, Gerald Calente, David Walker, Vernon Smith, Megan McArdle, Karen Horn, and Robert Van Order.
Reason TV also conducted an interview with the director of the film. You can see it below.
A lot of people need to know the 411 on the economic crisis. So many people are placing blame on this person and that person, when in reality it's really so and so who are the culprits behind the crisis.
The Foundation for Economic Education produced this 70+ article series on the Cliches of Socialism. Before I created this blog a reader had to use the search bar to find all 70+ articles. Now, after hours of painstaking copying, pasting and hyperlinking, the articles are all available in one spot.
You may have heard some of these before:
#52 Wars bring prosperity and jobs #7 The Free market ignores the poor #51 Tax the rich to help the poor #44 A worker should be paid according to his productivity #43 No one must profit from the misfortune of others #38 One man's gain is another man's loss #32 We Never Had it So Good #31 If Government Won't Relieve Stress Who Will? #30 The Government can do it cheaper because it doesn’t have to make a profit. #29 Private businessmen should welcome government competition. #66 But it works in Sweden #2 If we had no Social Security, many people would go hungry. #6 The size of the national debt doesn’t matter because we owe it to ourselves. #5 Too much government, just what would you cut out? #3 The government should do for the people what the people are unable to do for themselves #26 I prefer security to freedom #23 If Free Enterprise really works, why the Great Depression? #17 I’m a middle-of-the-roader.
There are two things I wonder when people decide to expound their ideas and release them to the public: how long did this person think about the topic before deciding to write an article, and what was going on in their mind when they wrote it. In the case of David Horton's article "Green and Atheist: The Incompatibility of Religion and Environmentalism" the latter thought pulsated through my head the most. Perhaps I should have also extended that thought to the editorial room and pondered what the editor was thinking before he or she allowed this article to be published.
Horton's thinking is of the horrid kind: dreadfully obtuse and deeply un-philosophical (I think that's an irony). Or perhaps it is philosophical, in a sort of way that parallels the amateur D-grade philosophy of Dick Dawkins (do people call him Dick? Or do they just call him Richard?) Skewering Horton's position, in a sort of analytic-Plantinga-to-Dawkins kind of way, is something that can only be done by Plantinga himself, since I am not an analytic Christian philosopher. But at least addressing Horton is something that should be done, since Christians ought to be able to defend what they believe.
I find it unfortunate that something so badly thought through reached the light of day. Not only does the guy display his ignorance on contemporary religious thought, he seems to be out of touch with contemporary arguments for atheism (if there is such a thing as a corpus of atheistic thought). What makes things even worse, and even more laughable, is that he is arrogant about it (Does the question "anyone disagree?" at the end signal arrogance to you too, dear reader?)
In block quotes I have listed his thoughts.
It is odd that the Libertarians among the religious, so big on self-reliance for individuals and communities, don't apply that principle to the Earth as a whole.
It seems that everyone wants to take shots at Libertarians nowadays. Tisk, tisk. He probably is not familiar with the Libertarian work "The Politically Incorrect Guide to Capitalism." In chapter 6, How Capitalism Will Save The Environment, Robert. P. Murphy explains the relationship between capitalism and environmentalism, and argues that capitalism is the best economic system to support environmentalist ventures. Who would have thought that the laws of supply and demand would kick in to conserve oil and other natural resources by raising the price when resources are low, forcing consumers to conserve the resources they have or become more efficient with their resources.
Only atheists understand, deep down, that there is no divine Lone Ranger out there coming to the rescue; that if we don't save our own planet, no one else will.
This is such an old line that I'm sure many atheists will disagree with it or won't bother using anymore. The line of thinking goes, since we only have this one life, we must protect it as much as we can. The thinking goes further: those theists, since they believe they will be going to Heaven, must have less incentive to take care of the Earth, since Earth is not their home but a pit stop to Heaven. Before I focus on the latter, I will focus on the former. Why is it that when someone reasons this way they never bring up the other side; that is, the side which says because this is the only life I have and I am going to do what I want--that brand of atheism does exist too. Not every non-believer is a principled scientist, philosopher, "Greenie" or "Darwinist" (although they don't have too many options for creation stories). Some people just don't care and are apathetic. As for the latter, Christians, as N.T. Wright explains in the video above (make sure you check out the video below too), are to be preparing the Earth now for the Kingdom to come in its fullness. Heaven is something that is coming to Earth; we are not coming to it when we die, and that theology makes a profound difference in how one views the Earth.
Religious people, even putting aside the Left Behind loonies, aren't really concerned, because they have an imaginary friend who will look after them if they are good and pray hard and wear the right clothes and don't cut their hair.
Oh really, you mean an opinion poll back in 2001 revealing that "Because God created the world, it is wrong to abuse it" doesn't matter? Should we not exclude these folks from the already excluded Left Behind loons and call them unconcerned? Since Horton is a scientist, it would be to his horror to find out that as early as 2001, Christians were pioneering the use of drought-resistant crops in famine-ridden parts of Ethiopia. Also, in 1994 what appears to be over 100 signatories have signed the "Evangelical Declaration on the Care of Creation." Perhaps it would be too much for evidence to contrary to find out that Christian theological seminaries actually have courses on environmentalism and stewardship, or that Christian biologists have come together to create an institution to educate the community on environmental issues. Oh no, that would be too much. Let's keep that quiet so we can keep our pro-atheist views in good standing. We wouldn't want anything to undercut our ideology (wait, our belief is not a belief). We don't want anyone to think that Christians actually care for mother nature, now do we?
[The Earth] is best helped by those who understand that these ecosystems have evolved naturally over tens of thousands of years, not by those who think the Garden of Eden was a real place and that the Biblical Flood was a real event.
This idea doesn't even follow from the premises. How does knowing about the traditional Darwinian explanation of our origins tell us whether a person will be caring or a "better helper" to the environment or not? It doesn't. Plus, he doesn't appeal to one relevant branch of science (ecology, biology, zoology, geology, etc.) to support his claim. He just makes an assertion (Big Deal). To prod further, what exactly are we supposed to know about the environment that will help us take care of the environment better? I'd also argue that the opposite is true: knowing that we have Darwinian origins can be a real downer for some. People who are of the more nihilistic bent, if they don't allow it to drive them nuts, could feel unmoved to care for the environment, despite knowing our natural theory of origins. If they feel as though human history has no ultimate purpose, that may diffuse some of that energy to help the environment.
Greenies really understand the proposition that all these species are in it together, that we are all cousins, that we all come from a common ancestor, and that all have either a complete right to exist or no right to exist, not some of one and some of another.
I'm not to sure what the second half of the sentence means but I will try my hand at it. I don't see how the replacing the common ancestor idea with the idea that we are created by one God does any harm to environmentalism, or all those cute and cuddly animals. He also implies that Christians, or at least theists, believe that because God is the creator some have the right to hold the keys to the animal kingdom--i.e. who gets in and who stays out; which animals will we eat or eat us (Yikes!Down Bambi! Down I say!)
And, I would hate to rain on his parade but what is this notion of having a right to exist? This doesn't seem to be very consistent in light of atheistic evolution. If we just happened--from the big bang to evolution--then why does anything have rights to live or not? If an atheistic big bang scenario is your starting point then you have no right to exist, you just exist.
I think Dinesh D'Souza was right in his debate with atheist ethicist Peter Singer when he said (something to the effect of)that I wonder if the animals think the same way too. In other words, if we take the position that "we have a complete right to exist" is a bear wrong for wanting a human snack when we decide to go on our camping trips? Heck, if we take this position we must ask if it is ethical for the bear to eat fish out of a river? What about the grass? Clearly, other animals don't think that other animals have the right to exist, or at least they support their right to exist right up until the moment they are consumed. Oh and since "we are all cousins" that's one heck of a round of family feud isn't it?
Ultimately I think the preceding quote is unclear. For example, what exactly does he mean by no right to exist? Does he mean it in the Libertarian sense, that people have a right to life but not a right to be supported to live? Or does he mean it in the way I think, that as Darwinians we have no ultimate rights. That all rights are contrived.
unless you really feel the wind and the sun and the smell of marshland or grassland rather than driving in your air-conditioned car from your air-conditioned house to your air-conditioned megachurch, blissfully unaware of being part of nature,blissfully believing that you are somehow above all that
So is this guy telling me he doesn't like air-conditioned places or doesn't drive an air-conditioned car? If he is driving something without air-conditioning (assuming it's an older car model), I'd doubt the environmentally friendliness of his car. Technology has a way of being efficient with resources and being environmentally friendly at the same time. Driving an environmentally friendly car shows awareness of environmental issues (to a limited degree) and is an environmentally friendly act in itself.
And is he really suggesting that these same megachurch-attending Christians don't have the capacity to care about the environment or bask in the splendor of nature? Tell that to the Christian Camp and Conference Association! And then follow them on Twitter!
Somehow, I think Mr. Horton is blissfully unaware of all thebooks onChristian environmentalism that have come out during the past decade; and I think he is blissfully ignorant about how Christians view the environment in the 2000's (and 90's). Perhaps next time, he can be a little bit more objective, you know, like science.
The rest of N.T. Wright's talk on 100Huntley can be seen here.
I'll go watch some of my imaginary friends now. They provide much comfort.
America can and will reach a point of no return if her leaders and citizens do not wise up and turn from their economic, ethical, and theological sins. What I mean is that Americans, for too long, have had a hand in perpetuating the problems in this country by being too supportive of the very things that will hurt them. The biggest example of this is the support of the vision of Barack Obama - actualized by his election as POTUS. I do believe that if Americans continue to support or act in ways that will eventually hurt them, their actions can not go on indefinitely and their Wile E. Coyote cliff-walking acts will condemn them. People who walk off cliffs without parachutes will have a hard time surviving once they hit the ground. In the same way, a country that strangles itself via inflation, and excessive regulation, will lose all their economic steam and will grind to a halt.
Perhaps this metaphorical grind to a halt is the point of no return; if that is true, then the only way to get the economic train moving again is to find more coal to throw in to the engine of the train. But a crew that has to find coal en route to their destination is a crew that has to take time off from manning the train; and an unmanned train with no steam is a train that is going no where until the crew gets off the train, locates coal, acquires the proper tools to bring the coal back to the train, and then has to return to the train to get it moving again.
The preceding paragraph could be a metaphor for the time-consuming process of getting the economy moving again once it likely (and unfortunately) stops. The time will come when people will have to begin saving and investing to produce by honest means.
Eureka! I just got another idea for a metaphor. To understand it, you must recall that the crew had to leave the train - and they had to leave all those passengers behind. (Keep in mind that the conductor of the train and the crew members do not serve as a metaphor for the POTUS and Congress or any one group "running the economy." Rather they should be seen as general metaphor for producers in an economy, perhaps a single business entity.)
At one point in time, all those passengers were serviced by attendants, eating as much they liked and what they liked, as long as the reserves weren't depleted. But what do the people do once they are left en route to their destination. People would have to eat and drink much less, which could be seen as a metaphor for the drop in the standard of living which will come once the economy comes to its halt.
It will be through this necessary correction period that people will learn the true meaning of under-consumption and savings to produce real wealth. I think the metaphor ends here, but the learning doesn't.
In the following articles and video several commentators discuss the economic version of the "point of no return" idea; and Thomas Sowell takes on the ethical and ideological version of the idea. Perhaps my metaphor goes beyond the intention of the writers of the articles, but hey creativity is what this blog is all about, right?
As usual, we can expect that government estimates are actually higher than predicted; however, the government is not solely at fault (and may not be at fault at all). In this instance, BP gave Congress the estimates on how much oil is being leaked daily; the original estimates were 5,000 gallons per day, whereas new independent estimates say the spill is much larger.
Wouldn't it be nice if people would just tell the truth. Maybe that initial panic that they fear will be induced will be channeled into a motivation to find a solution.
Here are a few lectures -- one on economics and the other on resurrection of Jesus -- by two scholars whom I greatly admire, especially N.T. Wright.
I set the links to Gary North's columns and website in the "Inform Your Worldview" column on the right side of the screen. However, the Wikipedia article is pretty informative on who Gary North is. I understand that many people don't like (or never heard of) Gary North, but I find his demeanor kind even if his past theology was in error. I am ambivalent towards his presuppostionalist philosophy, but as a Mises scholar and writer for Lew Rockwell, he is very informing. He has written many books including an economic commentary on the Bible, which I hope to subject to academic review as I pursue my Masters in Theology (or Masters in Divinity) and possibly my Ph.D (that's really far ahead in time; I'm think I should focus on my Master's first).
As for N.T. Wright, he is a New Testament Scholar and the Bishop of Durham. He is a fascinating scholar and an eloquent speaker and I suggest his lecture below. His unofficial website is awesome and it has plenty of writings and audio available. He is an advocate of New Perspective theology and his views on the resurrection are, in the words of a fellow religion major at La Salle, "refreshing and challenging." I also have a playlist on Youtube comprising of N.T. Wright videos which is much shorter than the videos below.
After reading Crash Proof: How to Profit from the Coming Economic Collapse (I began it Monday morning and finished Thursday evening) I was well prepared to answer a friend's objections to my assertion that there will be a "Greater Depression."
Honestly, my arguments come straight out of Crash Proof.
The argument all started when I posted a link to an article from LewRockwell.com on my Facebook page. The article advocated that the second Great Depression is on the way and suggested 20 items that will be needed to survive. My comment over the link was this:
Preparedness is the best way to weather the coming economic storm...believe me the worst has yet to come...it simply hasn't happened yet...all our politicians have done is simply push off the financial day of reckoning...in doing so we now have more to reckon with...(think of it as pushing off a student loan to a later date...the interest accrues and the total you have to pay back is more.)
And I think that was enough to get the ball rolling.
My friend and I have a somewhat interesting history. We both attended the same university (he is a 2009 graduate; I am a 2010 graduate). In the spring of 2008, he actually was the one to convince me to join the Barack Obama campaign at our school (before then I had no political affiliation; although I leaned Democrat). I did for a while, even up to the 2008-2009 school year, but then I left (I actually joined College Republicans afterward, but I left that too, only to go back a year later); he remained a dedicated member of the campaign and Young Democrats. And like most people who argue from different positions, we hold profound disagreements in maybe just about everything (except religion).
Here is the argument thread:
HIM: "We're headed for a great recovery. Lets not forget that over the last six months our economy has grown grew by about 4.5%, a very aggressive growth rate, and one of the highest clips in the western world over the same time period. The American consumer finally feels confident enough to spend again, and so do businesses. Soon they'll begin accelerated hiring. We've almost turned the corner. Hardly proof my friend of an economic apocalypse."
ME: "So we are working with the same statistics, but we are obviously interpreting things differently. If I understand you correctly then consumption, consumer confidence and hiring is evidence for economic recovery. If that is so that is where we depart ways. I don't understand your 4.5% statistic -- is this production? consumption? something else?"
HIM: "economic productivity....and hiring, productivity, consumption and consumer confidence are evidence of an economic recovery, indeed they are the hallmarks of one. A simple truth is becoming clear Chris: The economic relief package passed by the Congress is working. The Obama Admin. saved us from economic abyss. I hasten to add that if we didn't ... See Morepass the relief packages more Americans would be unemployed, more houses would have been forclosed, more businesses would have closed, and American influence would have further waned around the world. Thank God we acted"
ME: "I noticed you left out production. An increase in productivity means employers are doing more with less workers, which is good on one hand, but on the other it also means that payrolls are still tight and employers can't afford to put people back on staff. Productivity deals with efficiency, yet production deals with the quantity of goods being ... See Moremade. My point is that we need an increase in production before any serious recovery really happens. When more money is injected into the system via relief packages, yes on the one hand people can pay for goods, keep their homes, keep businesses going, but that comes at a price. The increase in the supply of money into the system without increase of goods and services will lead to price inflation. In other words, you just socialized the pain to everyone else because the U.S. Dollar loses purchasing power.
Second, we have a massive trade deficit and we are in debt up to the moon. Consumption would only be good if we were using our own money to buy things. But we are not; we borrow billions of dollars a day from China. The consumption ends when China stops playing our game. I don't believe China will finance our consumption indefinitely.
Third, we need to go back to savings and under-consumption to move forward. Until people learn how to save again to produce goods we will never move forward.
I'll wager (nothing) on this, if the Obama administration (or any future administration) has to continue to pass relief packages then I think that proves my points both that the economy is not recovering and the relief efforts only delayed the necessary economic depression. Why necessary? Because absent the bailouts all those bad assets would have been liquidated and better company would have picked up the slack. But instead by bailing them out a company with a bad balance gets off the hook, as if they had a change of heart or quickly change their bad practices. They were failing for a reason. Let em' fail."
HIM: A few problems with you thesis,
One, "now hiring" signs are being posted in businesses and shops across America. Last month we added 300,000 jobs to our economy. The month before we added an addtional 160,000. Thats almost a half of million jobs added...in sixity days!
Second, most economic forecasters believe that the odds of a double dip and a spike in inflation are quite low over the next four quarters.
Third, the notion that China would dump a signficant amount of American debt in the near future is laughable. Clearly it would dramatically alter US Chinese relations. Moreover, I don't see the wisdom in undermining your biggest trading partner. But most importantly dumping our debt would depress the Chinese economy. Its a lose-lose, which is means its non starter.
Our economy is growing precisely because of the bold actions of this adminstration. We need economic reform, we need to cut spending, reduce the size of government and increase revenue, perhaps with a VAT tax of some kind, or a modest income tax increase. For the first time in almost a decade we're on the right road again, and we can't afford to turn around.
[END]
As you can see I left the arguments intact, grammatical and spelling mistakes included. I let my friend have the last go around, but it was really enjoyable to hear the other side of the argument, and get someone to grapple with my economic pessimism. While I agree that we need to cut spending and reduce the size of government, I definitely disagree with the idea that a VAT tax of any kind or a modest income tax is the solution to our economic ills. My main concern with that thesis is that people need to save more, not save less by giving more money to the government.
As for his appeal to "most economic forecasters" I find this to be the least robust response; and I think other Austrian economists would too. Our belief, if I have been amongst these group of thinkers long enough to speak as an authority, is that mainstream thought, for the most part, has gotten the whole economy wrong; their prognoses are incorrect, and so are their prescriptions.
Finally, I disagree with his view on China. Lose-lose situation it may be for China--on the one hand, they can dump our debt and depress their economy; or they can keep our debt and hold devaluing U.S. dollars--but in the long run China will be better off by dumping our debt. In fact, the purchasing power of the Yen will increase dramatically, while the U.S. dollar's purchasing power will plummet. I didn't address everything in this recap, but I think I addressed enough.
Also, watching this lecture that I personally attended and partially recorded would be a quick primer on Austrian Economic thought, and thus would be helpful to understanding my position.
[Update on 5-20-10] Peter Schiff argues that the fundamentals of the economy are still unstable and that the bigger financial crisis has yet to come; he also argues that the perceived recovery is a sham and the new financial regulatory reform is merely going to exacerbate the problems that are already there.
