“The Reagan Counterrevolution” - Peter Schiff
I condensed the following article and took out the main points that I felt were important. I sure hope Obama is smarter than Schiff gives him credit for or else things look grim for America. It’s rather interesting being an American living in Canada because as soon as Obama was elected president, I noticed small differences in the way Canadians refer to their fellow neighbor to the south. Our public image has been so bad for so long that at least it’s a start, but I’m not so sure that Obama really has what it takes to turn our economy around, but time and economic policies, will tell.
I will say that something good has come out of Obama’s election, and that it has stirred up quite a buzz among younger voters. It’s clearly evident if you visit YouTube at all, and I can’t remember in my lifetime there ever being such an excitement about a President. Normally it’s like, who won?
Ok..here are the key points I wanted to highlight from Schiff’s article.
Our economic problem:
What nearly all politicians, on both sides of the aisle, fail to understand is that the current contraction and credit crunch is necessary to restore order to an economy that is horribly out of balance. Years of misguided fiscal and monetary policy and market-distorting regulations have resulted in reckless borrowing and spending on Main Street, pervasive gambling on Wall Street, and rampant fraud and corruption at every intersection. America’s borrow and spend economy, and the bloated service sector that evolved around it, must be allowed to topple, so that a more sustainable economy grounded in savings and production can rise in its place. Any government efforts to delay the adjustment and spare us the pain will backfire, turning this recession into an inflationary depression.
The President-elect has promised to cage the destructive forces of capitalism, impose more regulation, raise marginal tax rates, increase government spending, and restore prosperity by redistributing wealth from those who earned it to those considered to be more deserving. Like most of his generation, Obama believes that economic growth results from consumer spending, primarily from the middle class. Any policy that keeps the consumers headed to the mall will be promoted.
America will lose any resemblance to the economic titan of the 20th Century. Our standard of living will decline sharply, our economy will be ravaged by inflation, tens of millions will be unemployed, more individual liberties will be surrendered, and rugged individualism will be supplanted by the nanny state. In short, Latin America may extend north to the Canadian border.
While I’m thinking about it, Trader’s Narrative did some good work concluding that Wall St. does prefer a Democratic President. Check out it, as it’s rather fascinating. Besides, I really wanted to end on a positive note.