Home > Uncategorized > We Need an Economic Liberty Party

We Need an Economic Liberty Party

Today, we have two main political parties, the Democrats and Republicans. While they have significant platform and ideological differences, unfortunately – in terms of the size and scope of the government's intrusion into our economic lives – the trajectory of both is the same. Both have the propensity to expand the size of the federal government. Both seek to shift wealth from one group – you, to another group – their political supporters. Their supporters may be the poor, banks, corporations, military contractors, favored groups or interests, etc. In the end, economically, the result is similar. Economic resources are transferred from more productive to less productive uses. In the process, a portion of those resources is lost down the federal rat hole. For every dollar taken from you, less than a dollar is transferred to the end recipient. It's a horribly wasteful, immoral, and inefficient process. Neither party is guiltless. We can argue endlessly about which party is better on some position, or which will help the poor, or which will keep us safe, or which will lower our taxes, etc. In the end, without economic liberty, our country is lost.

In the past, we could possibly have debated on the proper size and scope of the federal government. Unfortunately, the government has overspent for so long, and its willing co-conspirator – the Federal Reserve – has blown economic bubbles for decades, that minor budget cuts around the edges will no longer be sufficient to prevent the ultimate collapse of our Ponzi economy.

The Market Ticker blog makes the case for why the current debt situation is unsustainable and that both outstanding credit and the size of the federal government must shrink 60% to save the economy. This, in turn, will lead to a 40% contraction in GDP. Personally, I prefer the government to shrink by 90% – providing for defense, and perhaps a few other areas where scale might be an advantage. Only by cramming down the bloated federal government, and then permanently keeping a boot on its neck, can we hope it might remain constrained for a time. I am under no illusions this will be easy, or that the government won't find a way to sucker a substantial portion of the population that our Fantasy Island economics can continue.

We will also need to eliminate the Federal Reserve and not replace it with another central bank – either U.S. or international. Banks must be returned to their role in financing real businesses and as a safe repository for savings. They cannot be involved in speculation, exotic financial instruments, selling insurance, investing, or any of the other idiotic schemes the politicians have allowed banks to be involved in for the past few decades.

If you believe that the Democrats or Republicans will actually do all of the above, you're certainly welcome to vote for them. However, I agree with Karl Denninger of the Market Ticker Blog when he writes,

But math doesn't care about politics.  It simply accumulates more damage, day by day, until we accept the math – and the truth.  The gap has reached a size that is mathematically impossible to grow out of through expansion of GDP.

You and I can love or hate the major political parties all we want. We can believe one is good and the other is evil. Certainly, there are important differences. However, unless some party takes bold action to eliminate the Debt to GDP Gap soon, the differences between parties will be the very least of our worries. We are talking about the economic viability of our nation. Anyone who pooh poohs this and argues for Keynesian schemes of money printing, redistribution of wealth, government filling the demand gap, quantitative easing, or throwing money out of helicopters is full of baloney. The laws of economics don't care about your ideology or if your chosen candidate says the right things. Math doesn't care about pork barrel spending. Math doesn't care about education, health care, defense spending or terrorism. You and I may care, but mathematics doesn't. The longer we maintain the gap between spending and revenues, the more economic pain we will experience. We will lose our ability to deal with any of the issues that mean so much to so many. Instead, we will be fighting economic collapse and struggling for mere survival. What do you think happens to health care and the poor then? What happens to our ability to stave off our enemies? It won't be pretty and all our debates and actions will look foolish with the passing of time.

We desperately need a party that will restore our economic liberty and free us from the anchor of debt that is threatening everything we believe in. I can only pray that someone will heed the call and save our republic before it is too late.

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