Liberal Snake Oil

Tuesday, July 12, 2011
Liberal Snake Oil
by Jacob G. Hornberger

If you've ever wondered what snake oil tastes like, just swallow a bit of what the liberals are prescribing for America's economic ills. Too bad the FDA doesn't make them put warning labels on that junk.

Liberals are saying that the key to restoring economic health to America lies in (1) increasing federal spending, (2) stimulating the economy with newly printed Federal Reserve paper money, (3) taxing the rich, and (4) piling on more federal debt.

Have you ever heard anything more ridiculous?

Hey, liberals, I've got a question for you: If your economic snake oil is so good ­ if it really brings economic prosperity to a nation ­ if it really helps the poor, as you claim, then pray tell: Why have the people in Cuba and North Korea been on the verge of starvation for decades?

After all, just think: All that communist officials in those two countries would have to do to end their poverty is increase government spending, have their central banks (i.e., their Federal Reserves) print more paper money, tax the rich, and increase government debt. They could then use all that money to embark on massive public-works projects, such as building dams, which would, liberals say, produce so many jobs and so much prosperity that such countries would quickly surpass the United States and the rest of the world in wealth and prosperity.

So, why haven't they done it? After all, it's not as though Cuba and North Korea have verged on mass starvation as of the last few weeks. They've been mired in abject poverty for decades.

Why are we libertarians so certain that statist economic proposals would not work in Cuba and North Korea? Because they haven't worked in those two countries! In fact, statism is what defines communist/socialist countries. And it is because such countries fully and completely embraced the economic snake oil that liberals are selling to Americans that they are still mired in deep poverty.

Consider the statist of idea of taxing the rich. They did that in Cuba and North Korea long ago. They took everything from the rich. They seized their bank accounts and nationalized their businesses. And they ended up frittering away the money and running the businesses into the ground. And then they figured out that with no private sector, there was no income to support the public sector with income taxes. Duh! And everyone ended up poor and working for the state, just like good little slaves and serfs.

When liberals call for more taxes on the rich here in America, what they fail to realize is that they might well be on the verge of tipping the private sector into a permanent state of growing collapse. Taxpayers can only handle a certain amount of tax burden. At some point the private sector will start to cave in on itself, with businesses closing and people being put out of jobs, which then increases the drain on the government's welfare-state system. That's obviously what has happened in Greece. It's the direction that the United States is headed into.

Consider the statist idea of stimulating the economy with newly printed money. How does that produce real wealth? It doesn't and it can't. All it does is distort the price system, introducing chaos into the marketplace. People make wrong savings, investment, and consumption decisions based on the distorted signals. The result is bubbles that end up bursting, as we've seen in the housing market.

Consider ever-growing government debt. How can a nation become wealthy when the government is saddling the nation with ever-growing debt that must ultimately be repaid by taxpayers? Real wealth comes from savings. When a person saves a million dollars, we call him a millionaire. When a person has a million dollars in debt hanging over him and no assets to speak of, we call him busted, broke, or bankrupt.

What is the real key to a nation's wealth and prosperity? Libertarianism! That is, a way of life in which people are free to keep everything they earn (i.e., no income taxation), no economic regulations or restrictions (i.e., free enterprise), unlimited accumulation of capital, free trade and open immigration, no paper money, no central bank (i.e., Federal Reserve), no government welfare (including Social Security, Medicare, and Medicaid), no government debt, and no imperialist warfare state, foreign military adventures, foreign military bases, and domestic military-industrial complex.

Libertarianism is the key to ending the economic woes and poverty in Cuba, North Korea, and the United States. Unlike the economic snake oil that liberals continue selling to Americans, libertarianism is genuine medicine for what ails the body politic everywhere.

http://www.fff.org/blog/jghblog2011-07-12.asp