When Bailouts Bottom Out

, James F. Davis, Leave a comment

“When you subsidize poverty and failure, you get more of both.” So wrote James Dale Davidson, who founded the National Taxpayers Union and currently writes a business newsletter. This is what our government has been doing in an unprecedented scale for the past four years since Liberal Democrats took over both the US Senate and House of Representatives. Bashers of Conservatives seem not to know this.

People seem to forget that Democrat Senate and House majorities voted for the Bank bailout known as TARP in 2008. Yet the Liberal media keeps saying it was Bush’s and the Republicans fault. Well it was partly Bush’s fault, but only because he agreed to the bill once he was convinced that the world’s banking system would collapse if our Congress did not do the bailout. But the bill was pushed through by Democrats, including then Senator Barack Obama, who was the major beneficiary of bank campaign donations.

Liberals seem not to know that it was government regulations that pressured the banks to make the risky sub-prime loans that led to the depression our nation finds itself in. They also appear to ignore the 13 separate requests for Senate and House investigations by the Bush administration of the government-regulated mortgage finance companies Fannie Mae and Freddie Mac that were blocked by Democrats in committee, principally by House and Senate Finance and Banking Chairmen Barney Frank and Christopher Dodd, respectively, both Democrats.

There was nothing laissez faire about regulation oversight and enforcement by Republicans. Both were blocked by Democrats.

The big time bomb is that for the past two years the Democrats in Congress have essentially printed money and given it to its donor base, i.e., lobbyists, unions, investment bankers, and local, state and federal governments so that they did not have to downsize their bloated bureaucracies. There probably will be no more huge stimulus bailouts.  Local and state governments will face huge budget deficits next year.

Services will have to be cut and/or local property taxes will have to be increased dramatically. I calculated that a 30% drop in federal and state subsidies to my county will result in a possible doubling of our property taxes. This will not be uncommon for many local governments in the next few years.

As Margaret Thatcher succinctly put it, “The trouble with socialism is, sooner or later, you run out of other people’s money.” Liberal politicians continue to give away things that they do not own.

Bureaucratic charity is not charity at all. It is like a mercenary soldier taking the spoils of war.

What the Liberal does not understand is that an increase in standards of living comes from the entrepreneur risking his life’s savings in the dream of providing a good or service better than his competition. When a government, like the present one, makes it clear that they are raising the cost of doing business, the entrepreneurs and their investors will not risk starting up new ventures, nor expand their risk in existing businesses that create new jobs.  Liberals/Socialists are the destroyers of jobs and the human spirit, and they are not even aware of it.

James F. Davis is the president of Accuracy in Academia.

If you would like to comment on this article, e-mail mal.kline@academia.org.

 

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