Remember the Twenties Mr. Obama. Yes We Can Cut Our Way To Prosperity!

One of Mr. Obama’s favorite lines of mis-truths is that “we can not just cut our way to prosperity”, i.e. cut spending, cut taxes.  First, let’s look at this as if it was your household that was spending many times more than it was bringing in, thus causing you to be in debt.  Would you not look to cut or reduce unnecessary spending?  And then would you not also look to do activities that cost you less, i.e. reduce taxes?  Of course you would.  And in doing these things, do you think that this would bring your household’s debt down and bring your income-spending ratio more in balance?  Of course it would.  Currently the federal government is spending more than 1 Trillion Dollars annually more than it brings in. Problem!  But, Mr. O and the Democrats would have us, particularly the intellectually uninitiated amongst us, that spending Trillions more than the government brings in isn’t the problem.  So to attempt to cut spending and cut the cost of doing business or engaging in wealth-producing activities is not necessary and won’t do anything to reduce the government’s debt-income ratio. Says the Administration.  Really?

Well, history tells us a different story.  Many of us have heard of the “roaring twenties” of America.  But, why was it called that?  It was a fantastic period of economic growth in America following one of the worst depressions we ever experienced; of which many of us today know nothing about.  Thus it is called “The Forgotten Depression”.

The economic boom of the early 1920’s followed the presidency of Progressive Democrat Woodrow Wilson.  Mr. Wilson’s economic ideology was that big government is good to grow the nation in times of economic strife. This economic theory is called Keynesian Economics; named after 20th century economist John Maynard Keynes.  Now, I just want to make clear a little understood fact, the term Progressive can be applied to both Republican and Democrat.  It is an ideology that favors gradual social, political, and economic reform that is to the left of traditional political views.  The Keynesian philosophy has as its fundamental basis that private sector decisions are inefficient so the government must take control for the economy to grow and be stable. The government does this mainly by the redistribution of the wealth that it receives from taxes, and it uses a concoction of government spending, tax breaks, tax hikes, and some spending cuts in order to curb inflation. Does this sound familiar?

Wilson’s economic policies caused a tragic reaction in the economy. Federal spending in 1913 was 2.0 percent of the Gross National Product (GNP); it jumped to over 7 percent. During his Administration, non-defense spending exploded 20 times higher than what it was before his Administration. The income tax rate for the “rich” jumped from 7 percent to 73 percent to pay for all of the new spending, supposedly. By his terms end, unemployment increased to nearly 12 percent, as GNP had declined 17 percent.

But the election of Republican Warren Harding reversed the slide into the economic abyss by reversing all of the failed Keynesian policies.  He followed one simple concept, “The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business.”  President Coolidge, stated, “the wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which every one will have a better chance to be successful.”. He reduced the top marginal normal and surtax rate from 73 percent to 58 percent [for those with incomes over $200,000] in 1922; to 50 percent by 1923; in 1924, it fell to 46 percent [for those with incomes over $500,000]; to just 25 percent [for those with incomes over $100,000] from 1925 to 1928; and then to 24 percent in 1929.  The American economy went through the roof!  The dreaded Bush tax cuts were similar in scale.  This is why it couldn’t totally be done away with.  The tax cuts are good for more than the “rich”.

The contorted notion that Mr. Obama, and of Keynesian ideologs such as Wilson, Teddy Roosevelt, Dwight Eisenhower, and FDR, is that taxing the very elements of economic wealth and production, i.e. the high income earners, big corporations, and such, will inspire the people to work harder and create more wealth. Chief Justice John Marshall stated an unrebuttable truth when he said, “Every tax imposed by government diminishes the power of the person taxed. Excessive taxation obstructs choice and entrepreneurship, which restricts freedom and prosperity for the individual taxed and the entire community.” Current history reveals to even the most passive observer that the high taxing retards economic prosperity. High tax States such as New York, Illinois, and California, as well as nations such as France and Greece are losing their income producer population massively due to their policies of high taxes and gross government spending.

The fact is that in no time in the history of the world has taking money from those who earn it has led to a nation’s economic might, less than being the economic marvel such as America.  The very idea of high taxation is intuitively repugnant not just to Americans, but human nature. That is why we love sales, discounts, and “tax free” holidays – to be able to keep more of our money in our own pockets. No one would look for where he can spend or lose more money, in his right mind.  We instinctively know when our home budget is running even slightly in the red to reduce our spending and look to pay less for things. And Mr. Obama knows this as well.  So why does he persist in this grotesquely flawed economic theory?  Simply due to the fact that we the people allow him to. The only other relevant question is will there be enough of America to reverse this tragedy after Obama is gone? Or will this nation still be run by the intellectually uninitiated?

Have The American People Gone Too Far Forsaking Liberty?

Congressman Ron Paul during his farewell speech to the Congress made some very provocative points that should give anyone who truly loves this nation serious pause regarding the path that we now find ourselves as a nation that was established to be the model of individual freedom and liberty.  Two statements he made that caught my eye were, “I have thought a lot about why those of us who believe in liberty, as a solution, have done so poorly in convincing others of its benefits. If liberty is what we claim it is- the principle that protects all personal, social and economic decisions necessary for maximum prosperity and the best chance for peace- it should be an easy sell. Yet, history has shown that the masses have been quite receptive to the promises of authoritarians which are rarely if ever fulfilled.” and, “The Founders were convinced that a free society could not exist without a moral people.  …Today the rule of law written in the Constitution has little meaning for most Americans”   Irregardless of what you may think of the messenger, the message itself  is troubling.

First, why is the message of liberty today not solidly embraced in today’s America, while at the same time many of us stand for the Pledge of Allegiance, wave “Ol’ Glory, and give lip service to its ideals?  Today there are more citizens receiving some form of assistance from the federal government, i.e., Social Security, Food Stamps, and Medicare.   Too many people are more willing to take a hand out rather that a hand up. With Obamacare, the government is now able to regulate or control every aspect of a citizen’s life.  During the past 12 plus years the government has expand to  unprecedented scales and during this recession government  jobs have greatly expanded, while those in the private sector have done so in the reverse.   The citizens of the United States and America have chosen to elect the most liberally social and economic minded man to be president ever who espouses nothing other than greater government, less individual liberty, and give to those simply based on their need and to take from those based on their ability, twice.  Group identity has surpassed individual identity in the consciousness of many Americans, whether it is based on sexual orientation, ethnicity, age, gender, or income. Such ideals are intellectually repugnant to the very principles of our nation’s founding.  In fact, today to even be so bold as to claim one’s liberties recognized in the Constitution as superior to any claim by a group or quote any of the Founders risk being seen as a radical, extremist, anti-diversity, anti-government, or anything short of a child of God.  The very concept of freedom and liberty has become an extreme psychological burden to many.

There was even actually an open conversation on The CBS Good Morning program last month by a so-called professor talking about honestly doing away with parts of the Constitution because they are not “inspiring” and equating the Founders with the U.N and France.  Really?  I have actually had heated discussions with people  over the issue of gun control. They questioned the need for anyone to have military-styled weapons or any amount of guns that they deemed excessive.  My response to them was it is the constitutionally protected right for any American to have as many guns as he wants. Period! Just as every American has the right to smoke as many cigarettes as her or she chooses, or anything else for that matter, gorge himself on fast foods, or spend all of his money on scratch-off lottery tickets, so long as it does not interfere with nor infringe upon my rights and liberties.  That is the truest and should be the easiest concept of freedom to understand.  Shouldn’t it?

America is no longer the freest nation economically, we’re 10th behind nations such as Chile, Hong Kong, and Mauritius, and we have more people in correctional institutions than Communist China or Russia.  Both of these issues are symptomatic of an underlined debasement of our nation’s moral compass and refusal of too many of us to embrace the weight of the responsibility that comes with personal liberties and freedoms.  To borrow a line from Spiderman, “with great power, comes great responsibility.

America was to be the shining light of freedom on the hill for all those seeking such to be guided.  There is no greater power than that of a free individual, a sovereign.  But, yes too there is no greater responsibility than that which is applied to that individual. Ben Franklin prophetically stated, “Only a virtuous people are capable of freedom.” 

But just as one may disclaim, so too can he reclaim.  Many of us have forgotten or have never been introduced to the greatness of our nation’s Constitution and founding documents and principles, so we know not what it is that is to be our birthrite and that has made us uniquely exceptional to other nations. Thus we lack the true significance of our incrementally forsaking our birthrite of liberty.  But, it is up to us to reclaim, to become reintroduced, or to become educated to what it is to be free. To question with stern boldness what direction those entrusted with the nation’s governance.  And if it is not the Constitution and or the people that they receive their authority, it needs to be asked then by which do they? And then seek real change.  Or else remember another statement made by Congressman Paul, “Once government gets a limited concession for the use of force to mold people habits and plan the economy, it causes a steady move toward tyrannical government.”