Government Intervention has hurt the Economy Reclaim Our Heritage
Our public education is in a
miserable state. Our money has no such guarantees. They only tell you it's a guarantee. The federal government just manipulated our economy in such a way as to take 1/2 of my retirement right out of my accounts. They're printing money so fast with no gold standard that the dollar is diminishing rapidly. You think your money is safe in a bank? What kind of guarantee is that? It did not diminish so drastically on account of the natural market. Government intervention caused this.
What do you think the "federal" reserve has done to our monetary integrity? The federal reserve is not a government entity, despite the word, "Federal" in there. It is a cartel, just like a drug cartel....crooks, thugs. They have destroyed the value of the dollar. It has not been backed by the gold standard for quite some time. And when that happens, after a certain amount of time, our country....the world economy will collapse. But our governement supports and is indirectly involved with this organization.
What do you think of the federal government's money monopoly?
I don't think monopolies are always a bad thing depending on what kind of monopoly it is. There are economic and social disadvantages and there are some advantages too.
Government Intervention: A Threat to Economic Recovery
June 10, 2009
Government Intervention: A Threat to Economic Recovery
by Ambassador Terry Miller
Testimony
Testimony before
The House Committee on Foreign Affairs'
Subcommittee on Terrorism, Nonproliferation
and Trade
June 10, 2009
--------------------------------------------------------------------------------
My name is Terry Miller. I am Director of the Center for International Trade and Economics at The Heritage Foundation and editor of the Index of Economic Freedom. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.
Though we sit today at what may well be the low point of a recession that has seen world economic growth slow to near zero, it is important to remember that what we are experiencing is a temporary setback. If one takes a longer view, it is clear that the economic policies that have come to dominate world economic thinking over the last 60 years, and especially since the fall of the Soviet Union, are producing strong broad-based growth, growth that is increasing prosperity and reducing poverty around the world.
The numbers are not ambiguous. Over the last decade, per capita income in all countries of the world combined has increased by an average of about three percent per year. Over the 10 years, that adds up to an increase of over one-third in average world incomes.
The growth in incomes is remarkably broad-based, not concentrated in just a few countries or regions. Of the 156 countries for which we have reliable data, only 12 failed to participate in this positive growth over the decade.
The economic system that has been producing these remarkable results is known by various names. Most economists would call it the free market system or capitalism. Some identify it with globalization. Some call it the Washington Consensus, because it represents the consensus of views and policies espoused by the World Bank, the International Monetary Fund and, at least until recently, the government of the United States.
At The Heritage Foundation, we call it economic freedom, and we measure it each year in the Index of Economic Freedom, which we publish jointly with The Wall Street Journal.
The key principles of economic freedom are individual empowerment, non-discrimination, and the dispersion of power:
Individual empowerment means that individuals retain control of where they live and how much they work. They have the right to own property and decide when and how to spend their wealth and income.
Non-discrimination means that there should be no preferences based on race, gender, religion, class, family connections or any other such trait. Each individual deserves an equal opportunity to prosper to the full extent of their ability and effort. Transparency in decision-making is a key aspect in ensuring such fairness; it is behind walls of secrecy that discrimination most often flourishes.
Dispersion of power means pursuing policies and practices that foster competition in labor markets, in capital markets, between firms and even among countries. The separation of political and economic power is a key aspect in the dispersion of power.
Countries that respect these principles of economic freedom do far better on average economically than countries in which governments play a more intrusive role. The countries ranked as most free in the 2009 Index of Economic Freedom had average per capita incomes of over $40,000, more than 10 times the income levels in countries where economic freedoms are repressed.
Some criticize the free market system as good for the rich but not for the poor. The data show otherwise. When we compare economic freedom scores with poverty levels as measured in the United Nations Human Poverty Index, we find that countries that gained at least 5 points of economic freedom in the decade between 1997 and 2007 moved almost 6 percent of their populations out of poverty on average. Countries that lost at least 5 points of economic freedom, by contrast, saw poverty levels increase.
The same positive trends are evident in connection with social development in areas like education, health, child or maternal mortality, and overall life expectancy, as well as in protection of the environment, where countries that are more economically free do a far better job than their less free counterparts.
Given these positive long term trends, and the proven good economic results in countries around the world that respect principles of economic freedom and market-based decision-making, I would submit that the first responsibility of policy makers in leading economies, especially in a time of downturn or crisis, is to preserve the capitalist system and to do no harm. Markets are by and large self-correcting. Government interventions, which are almost always designed to restore or protect the status quo ante, impede the corrective action of the market and thus slow recovery.
The record of government interference in the economy, whether in the United States or in countries around the world, is not pretty. The TARP and TALF programs, both initiated under the previous administration, are good examples of the problems of government interference in markets. The policy-makers involved argued that the programs were necessary to avoid an immediate melt-down in financial markets. We cannot, of course, know what would have happened in the programs' absence. However, from the perspective of six months following their passage, we can see that their lasting result has been not the hoped-for increase in stability and lending in credit markets, but rather greater uncertainty and volatility. Markets need sure and stable government laws and policies in order to properly price assets. The TARP, in particular, has created confusion and interfered with the establishment of a market-clearing price for the troubled assets in question. There has been a disappointing lack of transparency in the program's decision-making processes that leaves potential investors uncertain of the direction of the market and therefore unwilling to invest. The TARP may have artificially inflated the value of the troubled assets, but it has done little to get them off the books of the financial institutions.
The fiscal stimulus package passed under the current administration is even worse. Even if one accepts the Keynesian notion that increased government spending can increase economic growth, and there are real doubts about this, almost none of the money has actually been spent, or will be spent, in a timely fashion. One estimate this month is that only about $37 billion of the $787 billion stimulus package has been spent so far. Most of the money is projected to be spent in the future when government stimulus will no longer be appropriate and will most likely only contribute to inflationary pressure.
