Sunday, March 9, 2008

It's high time we preach personal responsibility and quit bailing out bad decision makers

I took a few days off from blogging here because it got a little bit hectic at work. That's one nice thing about working in a hospital is that no matter what the economy is doing you will always have customers.

I'm not sure if we really are going into a recession or not, but it sure looks like it at the present time. And, I suppose, that's one more reason why many people might want to give up on the republican party for a while and vote for a democratic president.

Personally, though, I think the democratic presidential candidates currently available would make the economy worse and not better, if they enact the poliicies and programs they are currently proposing.

In my last post I discussed that while FDR may have not been responsible for the Great Depression, he certainly did prolong it with his New Deal policies. Instead of the government stepping aside and letting the market fix itself like what presidents prior to FDR did, he opted to get the government involved. He created all those programs, and he raised taxes.

And the depressions prior to the Great Depression lasted one or two years, rather than an entire decade.

I am in no way saying that every part of the New Deal was bad. I think one of the great things that FDR realized was that a non regulated market leads to corruption. However, as we have learned since then, too much regulation leads to a depressed market.

If, for example, we make company A pay thousands of dollars to update all its equipment to meet certain environmental standards, that works the same as a tax increase on that business, and that's less money available for that company to spend on equipment and creating new jobs.

So, as new regulations are created, the benefits have to be weighed against the disadvantages economically. The same is true of creating new government programs. When you create them, taxes have to go up on someone. When that happens, those people who have their taxes increased will have less money to put into the economy.

I think that sometimes our political leaders fail to look at the big picture that way.

I know that Obama talks about creating programs to help all the people who have lost their homes due to foreclosures. And Hilary talks about forcing people to set aside even more money to create retirement accounts. To do either one of these will mean that taxes will go up.

Likewise, both of their health care proposals and the fact that they both would let the Bush tax cuts expire, would result in even more tax increases. All of these, in effect, would depress the economy, and prolong any recession we might be in. They might even throw the economy into a depression.

If it is a prolonged recession, or if a depression ensues, the media will not blame the democrats for creating all those new programs and regulations because those things make people feel good. When Uncle Sam bails out all the people who made bad investments in homes they could not afford, the government will look like a hero.

But it will be at the expense of all of us tax payers. They won't think of that. When you give money to one person, you are inevitably taking it away from someone else. And the person who made the stupid mistake will not learn a lesson.

And that really ticks me off.

My wife and I have been very frugal with our money since the day we met. We don't even have a yard yet because we opted to set aside money for our kid's for college. We have very little furniture because we opted to put money into retirement. Unlike most Americans our age, we were thinking ahead.

So it ticks me off that people who spend their days blowing all their money, go way over their heads in debt, lose their homes to foreclosures, and then we feel sorry for them. It's not my fault they made bad investments. If anything it's Uncle Sams for not teaching people how to wisely spend their money. It's Uncle Sam for catering to big business and encouraging people to purchase things they don't need, and putting it all on credit.

I would love more than anything to live like those people who purchase homes in nice neighborhoods, buy all the best furniture, spend thousands of dollars landscaping their yards, purchase snowmobiles, motorcycles, shanties for fishing, all the best toys for their kids, etc, just to impress their friends.

But I know the folly of that. My parents taught me to work hard and spend my money wisely.

So when I see so many people living way over their heads when the economy is doing good, and watch on TV as I learn they are now losing their homes that they couldn't afford in the first place, I have trouble feeling sorry for them.

Neither do I feel bad for the fool who spent all his money and has nothing set aside for retirement. I don't feel bad that he has to work until he is 70, as more Americans are doing now than ever before.

It ticks me off when politicians wish to bail these people out. So now not only do the people who made bad economic decisions have to have the government (mommy) prepare their retirement for them, so too do the wise people who have made good economic decisions all along have to get punished this way. And no government program will yield anything even close to what would have been gained in the public market.

It makes people feel good to bail these people out. It makes politicians look good when they bail people out. The definition of what I'm describing here is liberalism. Democrats reek of liberalism, but many republicans are tempted by it too, but not to the extent that democrats are.

I'm not saying that all liberal policies are bad. I think that Obama is right when he proposes that NAFTA is bad for the country in that it is not regulated enough and too many jobs are being lost as a result. But, he proposes to get rid of NAFTA all together. I think that would be even worse for the economy. However, this is a discussion for a later day.

I think it is good to have money available for people who really need it; for hard working people who really have fallen on hard times. And I believe that no child should go without good health care. But I think we need to come up with a program that is not regulated by the Federal Government but buy by the states or, better yet, local governments who are right there and can actually meet the people who are requesting assistance, and see that they really do need it.

As for government retirement programs. Instead of doing that, why not teach people in schools to prepare for their retirements? Why not teach them to think ahead? Why not teach some good old fashioned personal responsibility and accountability?

There are a ton of charities that I would love to give to. There are lots of people in my own family I would like to loan money to so they can start a better life for themselves. But if I did that I'd go in major debt that I'd probably never be able to get out of because I only make so much money at my job as an RT.

Hey, I could give money to all those people, but I'd go bankrupt. So, while helping them would make me feel good, and might make me popular amongst my peers (and the smart ones among them would be aware of my ignorance), it would be irrational.

I'm responsible with my money. I think other people should be too -- including Uncle Sam.

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