The Great Deformation

In the 1980’s Reagan cut taxes, but when the money ran out, he had no choice but to raise them. He promised “less management, not more” then raised military spending. Bill Clinton, ten years later, cut military spending AND public welfare at the same time, but kept the income tax and raised when the dot-com craze ballooned. So what can we deduce from this? We learn that while they had differences (30 years apart in age, one was an old conservative and the other a young liberal) both were street smart. They know that money can’t be “created,” and they knew that choices have to be made between strong defenses and a strong surplus.

David Stockman’s book explores years of dangerous meddling with the nation’s money supply. We’re not talking about the economy here, because the government can’t tell you what to make or grow, unless you’re getting a farm subsidy. The main antagonist in this book is the Federal Reserve and the government backed loans. Government bailouts don’t make any lasting change, because when the loans dry up, what do you do? If the loans are unsecured, what is there to repossess?

Despite the Republicans’ dislike for welfare, they’re been known to give welfare checks to big businesses, in the form of overpriced defense contracts and huge loans. Obama has done nothing to stop this; strip mining, mountaintop removal, overfishing, you name it, we have it, and it’s all permitted (or even financed) by the government. You can’t blame it on free market.

The bottom line of this book is that the US government should stop loaning huge piles of dough to big businesses through the Federal Reserve. They’re loaning money that we haven’t got.