Tuesday, August 02, 2011

The Real Story Of
The US Debt Deal...

... is not the triumph of the Tea Party but the death of the Socialist Left

by Toby Young - August 2nd, 2011 - The London Telegraph

For British conservatives, the US debt deal is a thing of beauty. Under the terms of the deal, the federal government will cut spending by $2.4 trillion over the next 10 years and there won’t be any corresponding increase in taxation. That is to say, the American Government has agreed to tackle its deficit by spending cuts alone. The British Government, by contrast, is planning to cut its deficit through a combination of spending cuts and tax rises – and it’s cutting it by a smaller amount.

Even if the Tory Party had won an overall majority at the last election, it’s hard to imagine it adopting such a bold fiscal policy. Yet the American Government is on the verge of adopting this plan in spite of the fact that the Democrats control the Senate and the White House.

A truly bizarre article by an extreme left wing supporter from Britain. The writer does not see the collapse of socialist government after socialist government all over the world as a result of the failure of socialism. He sees it as a political crisis that is being caused due to betrayal by the public at large - who he sees as too stupid to realize their mistake. The depth of his delusion can be seen when he calls the extreme left wing Marxist Barack Obama a "center left" politician.

His hypothesis is that failure to spend at lavish levels will cause the recession-depression to deepen. He believes that only debt funded spending can save our economy and he insists that Obama should start to blame the coming double dip on the misguided strategy of reducing debt. I suppose he has never read, or at least does not believe, FDR's own Treasury Secretary commenting on the FDR New Deal after 8 years.

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this administration we have just as much unemployment as when we started… And an enormous debt to boot!”

Of course, despite the fact that this is in the records of the House Ways and Mean Committee, progressives resort to a pitiful complaint that they "don't believe" he would have said that as their only retort. Democrats and progressives still reject that the minor recession that became the great depression was a result of FDR's policies. They also reject that his solutions were not the best way to end the depression, even though no previous recession had ever before lasted as long.

In truth, one of the biggest problems we have is that few elected officials really understand business or economics. Keynes was not an economist, yet his failed economic theories have more supporters among our elected officials than those who have read Milton Friedman's "Free to Choose" or Frierich Hayek's "The Road to Serfdom".

Even among Republicans there is sympathy for the Keynesian theories. They refuse to believe in the Republican Harding-Coolidge success that led to the roaring twenties, providing a huge increase in the American middle class in the process. Coolidge did not just reduce the growth in government, he slashed government payrolls and cut taxes. The result is still the greatest period of economic growth any nation has ever seen.


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