About This Blog

Ludwig von Mises (1881-1973) was the greatest economist of my time. His greatest works can be accessed here at no charge.

Mises believed that property, freedom and peace are and should be the hallmarks of a satisfying and prosperous society. I agree. Mises proved beyond a shadow of a doubt that the prospect for general and individual prosperity is maximized, indeed, is only possible, if the principle of private property reigns supreme. What's yours is yours. What's mine is mine. When the line between yours and mine is smudged, the door to conflict opens. Without freedom (individual liberty of action) the principle of private property is neutered and the free market, which is the child of property and freedom and the mother of prosperity and satisfaction, cannot exist. Peace is the goal of a prosperous and satisfying society of free individuals, not peace which is purchased by submission to the enemies of property and freedom, but peace which results from the unyielding defense of these principles against all who challenge them.

In this blog I measure American society against the metrics of property, freedom and peace.

Saturday, August 6, 2011

Reid Is Not An Honorable Man

I am through granting Senate Majority Leader Harry Reid the benefit of the doubt. Ignorance of economics cannot explain what this man says and does. He is a self-serving, partisan hack. He is not an honorable man. If I were introduced to him, I would not shake his hand. I would be tempted to spit in his face.

The country is teetering on the edge of a double-dip recession and  running a budget deficit of about $100-billion per month. Standard and Poors has just downgraded the country's credit rating for the first time in history. And Reid's response? A call for "closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners."

Reid's statement also said: "This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind - instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding."

(For those who don't speak "Washingtonese," a "balanced approach" means an increase in taxes.)

Even Keynes advised against raising taxes in a recession. Even if all the "giveaways" Reid mentions were ended, the resulting increase in revenue would barely make a dent in the deficit.

Reid has no intention of cutting spending. All the "spending cuts" his Debt Crisis plan contained were illusory, budgetary tricks meant to look and sound like cuts but in reality are merely tiny reductions in spending increases.

The US deficit cannot be brought into balance without severe and real reductions in spending in every area of government, including social security, medicare and medicaid. We all know it. Harry Reid knows it. He is an arrogant, power-corrupted statist.

Virtually every entrepreneur in the US has had to deal with a slowing economy at some point in his career. I was in business for almost 20 years. I had to deal with the recession of 1990. Business owners take their cues from the market. When sales are going strong and business is booming, entrepreneurs expand production and hire sales people. When sales contract, entrepreneurs are forced to pull in their horns, which means get mean and lean. This means cutting the fat, i.e., all unnecessary or unsustainable expenses and working harder with what is left. This often means laying off unneeded production and sales staff. Only a foolish business owner, faced with a drastic slowdown in sales, would expand production and hire more workers in a vain attempt to "raise revenue." Business owners know that spending is the only category they can directly control and that any savings in spending goes directly to the bottom line.

Yet, Harry Reid is not interested in spending cuts. His prescription for America today is increased revenue. He is apparently of the belief that the US government doesn't spend enough!

Anyone who tells me that the federal government has no fat to cut and cannot get lean and mean is a damned liar or a moron or he is sleep walking through reality.

Harry Reid is a damned liar.

UPDATE: Reid's statement mentioned the "balanced approach that the markets and rating agencies like S&P are demanding." Well, as it turns out, S&P is not demanding more taxes. This from Weasel Zippers:

The decision by Standard & Poor’s to downgrade the U.S. credit rating to “AA+” at once laments the possibility that cuts to entitlement programs will not materialize and the decreasing likelihood of new tax revenues. But it appears to give more weight to the need for more spending cuts, as it warns that a further credit rating downgrade is in the cards if the U.S. does not trim spending.
In contrast, while the report indicates that new tax revenues would help mitigate the debt crisis, failing to find these revenues does not immediately put the U.S. at risk of another downgrade.
Besides being a liar, Harry Reid is a jerk and a moron.


John Galt said...

Well said, Sherman.
It is rather disconcerting that what is obvious to you and me, it is such an inscrutable characteristic to more than 50% of the population of Nevada (and of course, is par of the course all over the nation).
That is the real Achilles hill of democracy.

John Galt said...

Sorry, "Achilles heel".

John Galt said...

But it is a "Sisyphus Hill".

Sherman Broder said...

I'd give anything to understand what makes a liberal/progressive tick. Take Chris Matthews, for instance. So much garbage comes out of his mouth, yet he seems intelligent. The logic of Austrian economics should be obvious to such a man, but he blows it off.