The Political Inquirer

The economy continues to slide down and it’s 1929 all over again. Franklin Delano Bush is the economic planner of our time. Though Democrats will want to call Bush a “Herbert Hoover”, they forget that Hoover was not a “do-nothing” president. He was an active president that actually implemented many policies that FDR got credit for. As the economy continues to crumble, Bush prepares a speech where he will probably announce new government policies to “save the economy”.

The fact is, the only reason our economy is crumbling is because of one giant entity: the State. Our federal government is responsible for this depression and every one dating back to 1913. If one will look around, it does not take long to notice that the biggest and prolonged depressions (as well as a bigger and more stable “business cycle”) has only happed since 1913 with the creation of the Federal Reserve, the passing of the income tax, and the direct election of senators. The creation of all of the federal organizations after 1913, from Social Security to unemployment compensation to Medicare\Medicaid have all turned out to be enormous failures, bankrupt and only able to stagger along when the US Treasury goes into more debt to “bail them out”.  We saw this happen just last week with Freddie Mac and Fannie Mae.

After ten years of inflation in the 1920s, there was an enormous stock market bubble. People thought the age of permanent prosperity was among them and that economic laws no longer applied. They were wrong. The insanely low interest rates of the 1920s were made possible by the Federal Reserve. These low interest rates caused businesses to misinterpret the market and to make more investments than they needed to (called “malinvestment”). Once the market started to correct itself, the federal government intervened to “help” the situation and ended up causing a depression that we did not get out of until after World War II!

The lesson to be learned is that the only way to fix this recession is to let the market handle it. Within a year we would probably be back on solid ground. With the government intervening, this recession might turn into a major depression and last for years, like the one in the 1930s. Once we are back on solid ground we must open the monetary system to competition and allow gold, silver, and any other form of money to compete freely on the market. Time will quickly eradicate the Federal Reserve notes and we will once again be back on a stable monetary system. Outlawing fractional reserve banking would also be a great benefit to our economy as the boom/bust cycle will then be ended from a monetary standpoint.

As Americans we must learn that freedom is the only solution. The government cannot make men richer, but it can make them poorer.