So, why don't we just have them make consumer products? If doing so was cost-effective, it would already be happening. This is why we have to fix our tax structure, why we must leave the WTO, and why we must restore manufacturing to the United States. Until we make production profitable, no one will want to fund it. Why would they? Any short-term gains would be offset by the longer-term costs, and it would have to be funded with debt.
1942 was the first time the average American paid income tax. Called the Victory Tax, it represented the largest tax increase in U.S. history up to that point. Furthermore, the government borrowed money directly from American citizens to fund the war. Americans purchased government bonds, dubbed war bonds, in record numbers. The war was funded through sacrifice and the wealth America had already attained.
America no longer has the savings necessary to fund a cost of this magnitude. In a recent op-ed for the New York Times, Paul Krugman, a winner of the Nobel Memorial Prize in Economics, called for more stimulus by the government. He said that stimulus in the form of tax cuts is much worse than stimulus in the form of government spending. In reality, without the means to fund it, they are both bad. If the government increases spending without increasing taxes, it still equates to debt. Krugman is essentially arguing in favor of an implosion rather than an explosion. Regardless, you still get devastation.
With no tax increase to pay off government spending, and no savings to fund expenditures, where do people like Paul Krugman want the United States to get all the money for more massive stimulus? Plain and simple: He wants us to borrow it from Japan and China; He may even want us to print it.
Krugman's prescription to get out of this recession is literally right from the playbook of Soviet-style Russia. That's what the Soviet Union did. They printed up a bunch of Rubles, and the government "found" ways to spend it. Did the Soviet Union have any economic growth despite massive "stimulus"? No. Have we learned nothing from history? Apparently.
As the economy weakens, the only option these Keynesians will fathom is to print money or borrow it. What we're going to get when Republicans win is not gridlock, but something much, much worse: bipartisanship. And the only way bipartisanship works is when you take the worst Republican ideas and the worst Democrat ideas and you combine them into one giant terrible idea.
All we'll get under Republicans is more stimulus. It will be a different kind, most likely in the form of tax cuts, but without a reduction in government spending, which will never happen in a Republican controlled-congress, (in fact we'll probably get spending increases), make no mistake, we'll right back where we started. This is the formula for runaway hyperinflation; this failed formula was used by the Soviet Union, has been used for centuries, and has resulted in nothing but devastation for the country that used it. If we cannot learn from history, we are doomed to suffer its fate.
"If the American
People allow private banks to control the issuance of their currency, first by inflation
and then by deflation, the banks and corporations that will grow up around them
will
deprive the People of all their Property until their Children will wake up homeless
on the continent their Fathers conquered " -Thomas Jefferson-
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