Religion, Politics and World Events They make great dinner conversation, don't you think? plus Political Film

The Perils of Economic Ignorance

Old 03-27-06, 12:20 PM
  #1  
DVD Talk Limited Edition
Thread Starter
 
Join Date: Nov 2004
Location: Pleasantville - in black & white ;P
Posts: 5,970
The Perils of Economic Ignorance

The Perils of Economic Ignorance
http://www.house.gov/paul/tst/tst2006/tst032706.htm

March 27, 2006
Ron Paul


Last week in this column I wrote of a perfect economic storm facing America, caused by a federal government that spends, borrows, and prints so much money that our dollars are eroding in value at an alarming rate. Year after year our federal government spends beyond its revenues, prints new money to pay its debts, and borrows hundreds of billions abroad in the form of Treasury obligations that someday must be paid. With too many dollars and debt instruments in circulation, and no political will in Washington to cut spending, we've created a monster. Our perceived prosperity depends on keeping the great debt and credit engine pumping, but the only way to attract new lenders to fuel the engine is higher interest rates. At some point one of two things must happen: either the party in Washington ends, or the supremacy of the dollar as the world's reserve currency ends. It's a sobering thought, but a choice must be made.



How did this happen? How did we get to such a state? The answer is found in the nature of politics itself. The truth is that many politicians and voters essentially believe in a free lunch. They believe in a free lunch because they don't understand basic economics, and therefore assume government can spend us into prosperity. This is the fallacy that pervades American politics today.



I believe one of the greatest threats facing this nation is the willful economic ignorance of the political class. Many of our elected officials at every level have no understanding of economics whatsoever, yet they wield tremendous power over our economy through taxes, regulations, and countless other costs associated with government. They spend your money with little or no thought given to the economic consequences of their actions. It is indeed a tribute to the American entrepreneurial spirit that we have enjoyed such prosperity over the decades; clearly it is in spite of government policies rather than because of them.



I certainly have seen firsthand a great deal of economic ignorance in Congress over the years. Few members pay any attention whatsoever to the Federal Reserve Bank, despite the tremendous impact Fed policy has on their constituents. Even many members of the banking and finance committees have little or no knowledge of monetary policy. Perhaps this is why so many in Congress seem to believe we can all become rich by printing new dollars, or that we can make 2+2=5 by taking money from some people and giving it to others.



We cannot suspend the laws of economics or the principles of human action any more than we can suspend the laws of physics. Yet this is precisely what Congress attempts to do time and time again, no matter how many times history proves them wrong or economists easily demonstrate the harms caused by a certain policy.



I strongly recommend that every American acquire some basic knowledge of economics, monetary policy, and the intersection of politics with the economy. No formal classroom is required; a desire to read and learn will suffice. There are countless important books to consider, but the following are an excellent starting point: The Law by Frederic Bastiat; Economics in One Lesson by Henry Hazlitt; What has Government Done to our Money? by Murray Rothbard; The Road to Serfdom by Friedrich Hayek; and Economics for Real People by Gene Callahan.



If you simply read and comprehend these relatively short texts, you will know far more than most educated people about economics and government. You certainly will develop a far greater understanding of how supposedly benevolent government policies destroy prosperity. If you care about the future of this country, arm yourself with knowledge and fight back against economic ignorance. We disregard economics and history at our own peril.
mosquitobite is offline  
Old 03-27-06, 12:30 PM
  #2  
DVD Talk Hero
 
Join Date: Jul 2000
Location: Madison, WI ("77 square miles surrounded by reality")
Posts: 29,976
[classicman]There you go again with your mythical laws of economics.[/classicman]

Good column by Rep. Paul. I have read the first four of the five books he recommends. I recommend them too, particularly Hazlitt's Economics in One Lesson. If there was one book I could get everyone to read that would be it.
movielib is offline  
Old 03-27-06, 12:53 PM
  #3  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,683
Yeah, my first thought was the major peril is having to make tons of posts here displaying a lack of understanding economics and how it affects human behavior.
X is offline  
Old 03-27-06, 01:02 PM
  #4  
DVD Talk Legend
 
Join Date: Apr 2002
Posts: 20,687
I thought a weaker dollar was good for growth.

At least that was the spin I remember.
Ranger is offline  
Old 03-27-06, 01:06 PM
  #5  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,683
A weaker dollar is good for exports and getting foreign money into the country and keeping domestic money here. It doesn't work so well with China's yuan pegged to the dollar though.
X is offline  
Old 03-27-06, 01:10 PM
  #6  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by movielib
[classicman]There you go again with your mythical laws of economics.[/classicman]

Good column by Rep. Paul. I have read the first four of the five books he recommends. I recommend them too, particularly Hazlitt's Economics in One Lesson. If there was one book I could get everyone to read that would be it.
looks like its available on the web:

http://jim.com/econ/contents.html
Venusian is offline  
Old 03-27-06, 01:23 PM
  #7  
DVD Talk God
 
Join Date: Jun 1999
Posts: 68,522
There are 2 congressmen who I wouldn't take anything they said seriously. One is Ron Paul. The other is Tom Tancredo.
classicman2 is offline  
Old 03-27-06, 01:26 PM
  #8  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by classicman2
There are 2 congressmen who I wouldn't take anything they said seriously. One is Ron Paul. The other is Tom Tancredo.


My list is longer than that, but those two are definitely on it.
Pharoh is offline  
Old 03-27-06, 01:51 PM
  #9  
Suspended
 
Join Date: Jan 2002
Posts: 52,192
Interest rates will rise, but not during this administration. Bush is making sure all his buds are getting massive loans now before the rates do increase.
DVD Polizei is offline  
Old 03-27-06, 02:00 PM
  #10  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,980
rates are already going up
Venusian is offline  
Old 03-27-06, 02:04 PM
  #11  
DVD Talk Hero
 
Join Date: Mar 2002
Location: East County
Posts: 33,140
Originally Posted by X
It doesn't work so well with China's yuan pegged to the dollar though.
I thought the Chinese weren't basing their currency on the dollar anymore?
B.A. is offline  
Old 03-27-06, 02:07 PM
  #12  
Suspended
 
Join Date: Jan 2002
Posts: 52,192
Originally Posted by Venusian
rates are already going up
I could be wrong.
DVD Polizei is offline  
Old 03-27-06, 02:08 PM
  #13  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by DVD Polizei
Interest rates will rise, but not during this administration. Bush is making sure all his buds are getting massive loans now before the rates do increase.




There is little doubt that by the time Ben Bernanke concludes his first rate-setting Federal Reserve meeting on Tuesday, the bank will have approved its 15th consecutive interest rate increase. Investors will be waiting not for what the Fed does, but what it says.
Pharoh is offline  
Old 03-27-06, 02:09 PM
  #14  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by B.A.
I thought the Chinese weren't basing their currency on the dollar anymore?
its allowed to move wihtin a 1% window or something ridiculous like that. its still pegged
Venusian is offline  
Old 03-27-06, 02:10 PM
  #15  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,683
Originally Posted by B.A.
I thought the Chinese weren't basing their currency on the dollar anymore?
Yes, they gave in and allowed it to deviate a whole 2%. Whoopee.

We'll have to see if the latest attempts to float the yuan do anything.
X is offline  
Old 03-27-06, 02:11 PM
  #16  
DVD Talk Hero
 
Join Date: Nov 1999
Posts: 36,980
isn't there a deadline this week?
Venusian is offline  
Old 03-27-06, 02:12 PM
  #17  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by X
Yes, they gave in and allowed it to deviate a whole 2%. Whoopee.

We'll have to see if the latest attempts to float the yuan do anything.


It won't. I no longer believe the old maxim to be true.
Pharoh is offline  
Old 03-27-06, 02:27 PM
  #18  
bhk
DVD Talk Legend
 
Join Date: May 1999
Location: Right of Atilla The Hun
Posts: 19,749
Last week there were two US Sen in china and they threatened to increase tarriffs by 20% if the Chinese didn't increase the value of their currency by 40%. Anyone else think that was slightly strange?
bhk is offline  
Old 03-27-06, 02:34 PM
  #19  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by bhk
Last week there were two US Sen in china and they threatened to increase tarriffs by 20% if the Chinese didn't increase the value of their currency by 40%. Anyone else think that was slightly strange?


They have softened their rhetoric. I don't expect anything to be put forth before the end of next month, and likely never.
Pharoh is offline  
Old 03-27-06, 02:37 PM
  #20  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
BTW, the Senators in question are a couple of opportunists.
Pharoh is offline  
Old 03-27-06, 02:59 PM
  #21  
DVD Talk Hero
 
Join Date: Mar 2002
Location: East County
Posts: 33,140
Originally Posted by X
Yes, they gave in and allowed it to deviate a whole 2%. Whoopee.

We'll have to see if the latest attempts to float the yuan do anything.
Oh, that's what it was - I thought they did something a little more bold.

Last edited by B.A.; 03-27-06 at 03:06 PM.
B.A. is offline  
Old 03-27-06, 03:12 PM
  #22  
DVD Talk Hero
 
Join Date: Jul 2000
Location: Madison, WI ("77 square miles surrounded by reality")
Posts: 29,976
Good try, mosquitobite. We stayed more or less on topic for six posts.
movielib is offline  
Old 03-27-06, 03:23 PM
  #23  
DVD Talk Limited Edition
Thread Starter
 
Join Date: Nov 2004
Location: Pleasantville - in black & white ;P
Posts: 5,970
Why is it that anyone who actually studies and understands economics leans right/libertarian? And vice versa
mosquitobite is offline  
Old 03-27-06, 03:31 PM
  #24  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by mosquitobite
Why is it that anyone who actually studies and understands economics leans right/libertarian? And vice versa

I don't find this to be true and I deal almost exclusively with those type of people. A majority perhaps but certainly not all.
Pharoh is offline  
Old 03-27-06, 03:35 PM
  #25  
Moderator
 
Join Date: May 2000
Location: In mourning
Posts: 26,218
Originally Posted by movielib
Good try, mosquitobite. We stayed more or less on topic for six posts.


We are as on topic as we are in any thread.

As for the basic thought, I am no longer sure I feel the same basic way. It used to be almost a mission of mine, but now not only do I not care, I sometimes wonder if the general populace possessing an accurate understanding would do more harm than good.
Pharoh is offline  

Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.