I hereby answer Matthew Green’s challenge of “bring it on” regarding how unbelievably wrong he was in his recent column on the economy (Get real about the economy, 02/23/2010).
One needs only look at history to see why more government involvement in economics doesn’t work. The recession of 1920 was by all accounts many times worse than our current downturn (the GDP dropped 6.9 percent then as opposed to 2.4 percent last year); the government cut taxes by two-thirds and spending by half, resulting in a very quick recovery. The only reason the recession of the ’30s turned into the Great Depression was due to the massive liberal spending programs. Henry Morgenthau, the treasury secretary under President Franklin Roosevelt, testified after eight years of the New Deal that “we have tried spending money. We are spending more than we have ever spent before and it does not work… After eight years we have just as much unemployment as when we started… and an enormous debt to boot!”
Now Obama is advocating the same big-government, fiscally disastrous programs enacted under President George W. Bush. Bush added $35 trillion in unfunded liabilities to Medicare, grew the regulatory budget and started the Troubled Asset Relief Program (TARP). President Barack Obama supported these programs and now wants to overhaul a sixth of the economy (health care) while running up deficits in the trillions.
Green, much like Obama, proposes raising taxes. This would take even more money away from the productive (private) sector of the economy while further inflating the unproductive (government) sector.
The only way to “get real about the economy,” as Green put it, is to get the inefficiencies of government out of the private sector. We need to privatize social security, privatize health care (including Medicare/Medicaid), cut regulations, abolish tariffs and subsidies, cut government spending and cut taxes across the board. History has proven economic success has a massive free-market bias. Get government out and growth will return.
Sam van Kleef