Obama: Private Sector is Doing Fine

Well, here's a honest statement from the regime for a change:

On Friday, President Obama inexplicably said 'The private sector is doing fine.'" Since the president is completely out of touch, these middle class workers talked about their experiences to remind him of the realities of the Obama economy.

The private sector of the economy is not doing fine. What's worse than saying that it is fine is the idea that more public sector spending will improve the private sector. No true economist would ever stand behind a statement like that, especially when our own federal government is barely above water in terms of debt. Our national debt is nearly equal to revenue, so increasing the numer of government jobs will only make that disparity even further top-heavy.

Most economists not on the government payroll (or the Fed's) have been saying that increasing government spending (and now debt-spending) has zero chance of righting an economy which has been running numbers that are beyond recession level and actually into depression territory (but that won't be heard on state media outlets). Deficit spending only exacerbates the economic problems and does nothing to counter the source; government itself. As more and more rely on government for income and handouts, and as fewer and fewer are able to pay in (involuntarily, naturally), the imbalance becomes even greater and likelihood of any true recovery slips further away.

As someone who understands markets and the detriment of government intervention in economics, Peter Schiff gives about the most qualified and accurate rebuttal to those statist claims that more state scope and authority is needed when that is exactly the root cause.

Peter Schiff : the money that the government uses to pay the wages of the public sector employees comes from the taxes that he imposes on the private sector , we should get rid of the government jobs , government jobs makes us poor private sector jobs make us richer

If anyone is surprised that interventionism consistently fails to correct economic hard times, they need to look a bit more objectively at the situation and actually learn about economics from a source other than the state itself. As Mises said, "tu ne cede malis." He was right even before those doing economic damage today were even born.

The problem with government intervention into markets is that increasing the money supply by the Federal Reserve is the exact worst thing to do in the situation. It creates a chain reaction that no monetary or public policies can stop. In a nutshell, this is what happens when governments increase the money supply and increase deficit spending in a false attempt to promote economic growth:

What happens when consumers are given money without a proper price comparison? (consumer demand should drive producer supply) Prices increase because there is more currency in circulation, rather than higher levels of production. Prices rise as a response to the new level of currency supply. What happens when prices increase? Consumers spend less. What happens when consumers spend less? Producers cut production, which leads to lower supply levels and lower labor demand, which in turn leads to higher private sector unemployment. Unemployment can not be negated by increased government spending or increased government jobs, as a smaller private sector workforce leads to decreased tax revenues.

Funny how sometimes bad ideas have negative consequences, ain't it?

The resulting hyperinflation and economic collapse is not the subject of conspiracy theory, but of the history books. This is exactly what happened to the Weimar republic in 1923 (now Germany), to Russia in 1992-1993, to Zimbabwe from 1999-2008, and many other countries around the world throughout history. This is even what happened to the great empire of Rome, whose Dinarius currency inflated until the economy collapsed around 230 AD. Once the course is set, very little can be done to avoid disaster. If there were, some of these collapses would never had occurred.

Interventionism champions such as Ben Bernanke and Jamie Diamond are truly  horsemen of a financial apocalypse. Their job  made easier by such willing victims.