Thursday, April 13, 2006

Big Government's Successes

Understanding the value of free market economics requires a lot of study and analysis. A study of history teaches us a lot of this. Primarily, throughout history, governments have proven themselves successful. Yes, that's what I said, successful.

It is a very real fact that the government can successfully change the economy for the better. However, when it does this, it is always very minute changes.

There are great examples of this. For one, governments have found that, by controlling the printing of money, instead of sticking by a gold standard, they can ensure that recessions are less severe than they would be otherwise.

The Federal Reserve board, the group in charge of the money supply in the US, has worked to control both inflation (rapidly rising prices) and deflation (rapidly falling prices) to avoid recessions. This has been a success on the part of the government.

There are many other examples. The US Government has been remarkably successful in its decision to support Israel. Israel is one of the major players in the Middle East, and by supporting them, we have assured ourselves an outpost in a very dangerous area of conflict.

The US Government has successfully produced an alternative to gasoline, made by liquifying coal. It has also managed to limit the usage of tobacco by its "sin tax."

It has ensured that companies survive and that industries don't break down during times of low revenue through subsidies. It has successfully rebuilt almost every country it has attacked.

Overall, there are a large number of things the US Government, through its place as a larger government, has successfully done. Unfortunately, there is more to the equasion. Next time, we will analyze the costs of these successes and realize an interesting fact that politicians today tend to neglect.


One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation. – Thomas B. Reed (1886)

For more on the Federal Reserve Board and Deflation:

Wednesday, April 12, 2006

Collecting our thoughts

Ok, since it's been so long, I'm going to do a recap of the major points touched on and see where we should go next. I have been running a few different directions that will all come together in the end, so I'll break them up for now.

1) First, We established that there are 3 Natural Rights: Life, Liberty, and Property. We then remembered "That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed" from the Declaration of Independence, and realized that the Constitution was built to restrain the government, not to enable it to expand. Following this, we found that the government only acts in one manner, through force.

We further learned that theft is simply the act of taking without permission and that this can never be justified. We established the importance of the Laffer Curve and the negligence in the concept that higher taxes equal higher revenue. We examined illegality in this area and understood that the only things that should be made illegal are those that are already Natural Rights to be protected. Therefore, our study of Natural Rights fit this one.

2) We studied that a market is the action of buying a good and all the variabilities involved. Then we examined two major economists who are cited as the greatest minds in the industry, Adam Smith and Karl Marx and compared the two though we have yet to clearly define which had a better plan for society. We then examined what Economics have to do with government and that Economics, as the study of people, is exactly what the government needs for its every action.

2) We looked at the "General Welfare" and "Interstate Commerce" clauses in Article I, Section 8 of the Constitution. We learned that the only power Congress has within that section is to "lay and collect taxes". Through this study we learned that Congress follows a 'strict constructionist view' of the Constitution and the courts are the only ones capable of following a 'living document' approach. Through this continuing study, having cited our founding fathers a lot, we studied what they thought of the Constitution and their views on the size of our government.

We learned that the best government, which is especially true in the United States, is one which governs least. Small government is better than big government. In our beginning to tie this group to the above, we learned that taxation not permitted under our "Social Contract" the US Constitution, is theft. During this time, we studied the purpose of a social contract and its existence in the United States.

In further discussion of the Constitution we fully examined the First Amendment and found that, when broken down, it reads:
Congress shall make no law referring to an establishment of religion.
Congress shall make no law prohibiting the free excercise of religion.
Congress shall make no law lessening the freedom of speech or freedom of the press.
Congress shall make no law lessening the right of the people to peaceably assemble.
Congress shall make no law lessening the right of the people to petition the government to rectify any harm it caused.

We then studied the Second Amendment and learned that, based on a proper reading, the government is violating it. We learned about the ex-post facto clause and bills of attainder and how that portion of the Constitution is also being violated. We hav avoided discussion on whether violating the Constitution in these cases is a good or bad thing as of yet.

We also studied what a politician, or "public servant" is and what "morality" has to do with laws. This is where we will continue next time. Hopefully after that, we will be able to begin further discussion on economics in government and tie these 3 finally into one.