Sunday, October 7, 2012

You can make a difference. It is up to you.

Despite what you may have heard about the polls, as of this date President Obama has a very commanding lead in the likely Electoral College for the 2012 presidential election.  If this concerns you, read on...


Politics is driven by unhappiness.  If people have nothing to complain about then they have little reason to be interested in politics.  However, almost everybody has some sort of gripe and many of those people want government to fix their problems.  But that is where we go wrong.  Government can't fix every problem.  When it tries to do so, it fails miserably and goes broke.  We are currently going bankrupt trying to fix everyone's problems.  


People get elected to political office by making contradictory promises to different groups knowing full well that they can't keep all of their promises.  


President Obama says that this election is a clear choice between two very different visions for the future of America.  He is correct.  The President's vision is one where the founding principles of this country were a mistake, so he wants to "Move Forward" toward a European style socialism, where the GDP per capita is half that of the United States, the countries are drowning in debt and there are riots in the streets.  When he says that he wants to change America, he means it.  We have had 4 years with up to 1.5 trillion dollar deficits and unfathomable debt.  The national debt is around $204,000 per family of 4 and increasing every minute.  We cannot afford 4 more years of this because we will be forever impoverished.


The president's vision, along with most of our recent presidents, is based on Keynesian economics.  Keynesian economics believes that the government can boost the economy by spending more during an economic downturn.  There are many problems with this, the most important one is that it has failed repeatedly.  This kind of thinking lead to Japan's "lost decade" and a worsening of the Great Depression.   One reason it doesn't work is that the money has to come from somewhere, either through higher taxes, or from the credit markets which puts us deeper in the hole.  The Keynesian approach is like taking water from one end of a swimming pool to fill up the other end.  All that is really accomplished is that government appropriates and misuses resources that could be better used by the free market.  Government spending also tends to enrich some people at the expense of everyone else.


Our government has been financing some of its excessive spending by printing money, which is a hidden inflation tax on you and me because it makes our money worth less.  It would be O.K. if the monetary supply were deflating, but the actual money supply has been wildly inflated by government policies. The government has been deliberately deceiving us about the real monetary inflation rate, so therefor we should expect major price inflation in the years ahead.


The Federal Reserve just announced that it is going to indefinitely spend $40 Billion per month to buy troubled assets in an effort to help the economy.  This is going to benefit banks, businesses, and people with large asset portfolio's, but we are the ones who are going to pay for it because they are buying the troubled assets with inflated money.  



A presidential race should be about the policies that the two candidates want to implement.  Instead, President Obama has tried to divert the discussion by attacking Romney for who he is, which is a wealthy businessman.  We have had wealthy businessmen as presidents before so it should not be a big deal.  But President Obama engages in these attacks because it is hard to run on his record or his policies, both of which are dismal.  This is the worst economic recovery since The Great Depression.

President Obama has tried to make tax rates an issue, but he disregards the fact that dividends are taxed twice.  We have one of the highest corporate tax rates in the world, which hurts business and hinders job growth.


President Obama says that we should not return to the policies that got us in the financial mess in the first place.  Which policies were those?  Democrats created Government Sponsored Enterprises nicknamed Fannie Mae and Freddie Mac that bought up 80% of the loans made in the United States and then sold these loans to investors as Mortgage Backed Securities that were touted as safe with the implied backing of the federal government.  These GSE's were championed by Democrat leaders like Barney Frank.  In addition, Democrats, primarily Jimmy Carter and later Bill Clinton, championed The Community Reinvestment Act that required banks to make loans to people who weren't credit worthy.  It is true that banks might not have cared about these bad loans because the GSE's bought them up, but the end result was a huge housing bubble and financial bust created solely by government interference in the market place.


We need to once again declare our independence from European style government, and from excessive wasteful government spending.  Our new Independence Day will be November 6th when the voters will decide that they have had enough and are ready for a change.  This could be the most important choice we will ever make.  The outcome of THIS election will determine the course of our country for the remainder of our lifetimes.  Let's not wait 4 more years to decide that we have made a mistake.  



If you want to make a difference, there is something that you can do right now that won't cost you anything.  You can forward this email to everyone you know.

Best wishes,

John Coffey

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