Our goal should be a balanced budget with the lowest taxes

Posted on: May 23, 2012 at 15:41:44 CT

possible. We didn't even have a Federal income tax before 1913! Can you imagine the standard of living this country would enjoy if the producers were allowed to operate at full productivity without the interference of the the government? It would be an incredible existence. The goods and services that increase the standard of living would be even that much more cheaper for everyone, especially the poor.

2. The financial crisis was not caused by deregulation. It may have been caused by the misuse of the financial instruments you wish to regulate (those being the issuance of subprime mortgages, credit-swaps etc.) but these are merely symptoms of the moral hazard created by an expansion of credit and insured risks. Subprimes/Credit-Swaps etc. are actions that would never be undertaken without the creation of the moral hazard in the first place. And, on top of that, they have been shown to be a very risky, many times unprofitable business venture. The free market, being the greatest and fairest regulator humans have ever experienced, has decided that predatory lending will not be a lasting business model -- we don't need a law for that.

3. The stimulus and TARP did not save us from a deeper recession, it just delayed it, probably making it worse. We bailed out bad debts, instead of allowing them to be liquidated. Prices are being driven down for a reason -- they are artificially high. No amount of stimulus could permanently fix the price of a service or good above its natural-market based level. We shouldn't fear the recession -- the recession is the cure to our mal-investments. But unfortunately, long term solutions never carry any political capital, so the politicians promising short term solutions will continue to win the day.