Real Thought

The Dow is off by 200 some odd points.  Finally, someone in Washington had the guts to shoo the autoo companies away from the Federal slop trough and it is going to be a beautiful day here in northern California.  What amazes me is that so many people in our country seem to believe that the government is the answer to all of our problems.  I find this attitude more and more pervasive every year.  For those of you who believe that government is the answer, I have a small reading assignment for you.  First, read Thomas Hobbes Leviathan. Once you are done with that you then need to read the Declaration of Independence.  Finally read Ayn Rand’s Atlas Shrugged. For extra credit you may read either John Locke’s Two Treatises on Government or John Stewart Mills’ On Liberty.

Now I realize that there are those who will say, “Doug, these ideas are old and outdated and besides Ayn Rand was a nutter.”  To them I would say that there are certain principles which are timeless, one of which is the preservation of individual liberty.  Furthermore, I would argue that the furtherance of individual liberty should be the object of any enlightened society  and that the current trend toward collectivization is not a step forward but retrograde movement toward slavery and totalitarianism.  As free individuals we should not be dependent on the state, instead we should solve what ever problems may arise through individual action or voluntary association, if necessary.  If we depend on the state, we become its slave and we sacrifice that liberty which is our birthright and for which so many American lives have been sacrificed.  We squander our inheritance and like Esau sell that which should be most valuable to us for a mess of pottage, the false security of a state taking care of us.

What will it take to make the idiots in Congress, the White House and at the Tresury Department to understand that spending money the government hasn’t got, driving us deeper into debt and printing money is not the way to get the country out of a recession?  There is only one way to climb out of this and that is fiscal restraint.  Insetead of a budget that will drive the deficit to a level that exceeds all previous deficits COMBINED, how about adopting a budget with no deficit.  Yes, I know that doing so will mean drastic cuts in government costs and services.  Yes, I know that it will be extremely painful to do so but if we do so now we will get the economy on track.  We must do this and do it now.  We need to push for a constitutional amandment that will ban deficit spending and we must also limit income taxes to no more than fifteen percent of taxible income.  If we do this now, that will free up a huge amount of capital for infrastructure improvements which, in the long term will expand the economy.

The Dow Jones Industrial Average finished up at the end of the week.  From the reaction in the media you would think that we have all regained all the money that we lost and that happy days are here again.  Here is the problem, a year ago the DJIA was at $13,191.49; it closed Friday at $7,223.98.  That means that while the recent four and five per cent gains are nice, the market still has a deep hole to climb out of.  There is also the nagging persistance of the fear of inflation as the Federal government attempts to spend its way out of this recession.  Is this merely an uptick in the market our the beginning of a long term rally?  I hope the latter but fear the former.

Very simple.  Cut the corporate and personal income tax rate to 11%.  Raise the personal exemption to $35,000 per person.  Allow everyone to take a automatic 10% deduction for charitable donations.  Eliminate all other deductions.  Eliminate the AMT, capital gains and estate taxes.  Make all investment and interest income tax exempt.  Cut Federal spending by 50%.  Eliminate the Department of Homeland Security, the Department of Education, the Department of Health and Human Services and the Department of Labor.  Watch the economy take off.