A liberal just informed me that capitalism creates huge boom and bust cycles. My response: Boom and bust cycles are created by the Federal Reserves easy credit policies moron. What do you think the housing bubble was? When you allow men in suits in Washington DC in New York City to control the interest rates, rather than having interest rates controlled by market forces, this is the kind of economy you get. The Fed has kept interest rates artificially low for such a long period of time that it created a situation that encourages over borrowing and discourages savings. Thats part of the problem that caused the housing bubble. That and the Community Reinvestment Act which changed the criteria to get a home loan, and the establishment of Freddie and Fannie as a place for lenders to park their bad loans, removing the risk from the lenders. The mortgage market was operating fine for decades until the government started messing with it. The reason people think that Clinton did a good job managing the economy was because he was president during the Feds boom portion of the cycle. But of course, any time you create an artificial boom in the economy, youre going to have a subsequent bust. This was illustrated by the Nasdaq bubble and the housing bubble both bursting. We didnt have the Great Depression until we had the Fed. We didnt have to enact the Bretton Woods Agreement until we had the Fed. We didnt have to go off the gold standard in 71 when the government couldnt pay its loans off in gold until we had the Fed. We didnt have the Great Recession, the Nasdaq bubble and the housing bubble until we had the Fed. The banksters have set up funny money central banking systems in just about every major country now. The economic problems we had in the 1800s were nothing compared to the Great Depression and what were going through now. And by the way, those history books you claim to have read were all written by the winners. They arent going to put blame where blame is due. And like I mentioned above, even Ben Bernanke admitted that the Fed caused the Great Depression, something free market economists have been saying for years. The idea that interest rates should be arbitrarily determined by the Fed chairman... instead of by the marketplace... is a recipe for disaster. When you have a free market economy and a free market banking system, interest rates are determined by market forces. When people started borrowing to buy all these homes with super low variable interest rate loans, it creates a bubble. Eventually that bubble will burst. If interest rates were controlled by market forces, when people started borrowing too much money, the interest rates would naturally rise. This would naturally put a stop to the over borrowing. If interest rates get too high, no one wants to borrow money and banks will naturally lower their interest rates to encourage borrowing. This sets up an equilibrium, where people can borrow money at decent interest rates, or put money in the bank and save it and get a decent return on their money. Now you people, liberals, want to do the same thing with wages. Wages should be controlled by market forces, not by feel good policies set up by the Congress. Next thing you know youll want price controls too. Then well end up just like the Soviet Union and well have people starving in the streets. Central planning of the economy, arbitrarily controlling prices, wages and interest rates is what causes the boom and bust cycles. Capitalism, free market capitalism, where wages, prices and interest rates are controlled by market forces is what prevents drastic boom and bust cycles. I dont care what your liberal history book told you in your liberal college class taught by your commie instructor. They dont know shit about economics.
Posted on: Fri, 23 May 2014 19:21:34 +0000
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