"Richard the Dreaded Libertarian" wrote in message
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On Thu, 16 Jul 2009 14:50:52 -0400, Ed Huntress wrote:
"Richard the Dreaded Libertarian" wrote in
message

I fear it's reached the point where the best that we Freedom-lovers are
going to be able to do is to hunker down, protect our jewels, and hope
we enjoy the ride when the whole card house collapses around us.

The irony of this downturn is that all those years of deficit spending
(with
no good reason) has left no choice but more deficit spending -- unless
you
want to do another Herbert Hoover and have the government sit there with
its
collective thumb up its butt, watching the economy go down in flames.

Um, I believe you've gotten this ass-backwards. The Govermnent is now
trying to do EVERYTHING, and the economy IS going down in flames.

No, the economy was on track to go down around six or eight months ago.
There is hardly an economist in the western world who doesn't know this.
There isn't one economist worth spit who didn't say, around the first of the
year, that unemployment wouldn't peak until sometime early in 2010.

That's the legacy we've been handed. It's been a very sharp downturn, for a
variety of reasons.


I WISH the government would sit on its collective butt and do as little
as humanly possible - then, the Free Market woluld pull us out of this
mess in a matter of months.

That's nothing but a bunch of ideological bull that's been running around,
mostly since the '70s, and there isn't a single example to support it.

And if you want to go back to Hoover's days, or before that, the "free
market" some people thought existed then was based on tariffs running as
high as 40%, a great big gift bag of export subsidies, and several other
things that made the market about as *un* free as it could be. And that was
BEFORE the Smoot-Hawley Tariff Act (1930).


But, I guess we're going to have to learn the hard way once again.

We always do. Hoover and Treasury Sec. Mellon pursued a free-market
approach; they dug us into a deep, deep depression. FDR started to turn it
around but then lost his political clout and cut back on stimulus programs
in 1936; the result was another whipsaw back into depression.

Free markets can't pull you out of a recession, Rich. If you try, the whole
economy just stalls out. The worst case is what happened under Hoover. With
nobody buying anything, nobody was investing. So the economy just spiralled
down.

We saw a smaller version with Japan over the past decade. They got into a
deflationary spin and a liquidity trap, and nothing budged. Japan's economy
just went into the doldrums. If we don't stimulate ours sufficiently, we're
likely to run into the same trap.

Again, this is what experience tells us. There IS NO experience to prove
that "free markets" can get you out of a deep recession.

--
Ed Huntress