Liberal Solutions for the Economy Are Statist Nonsense

by Jacob G. Hornberger
Aug. 16, 2011

It is so funny watching liberals coming up with all sorts of weird solutions to America’s economic woes. Every one of the solutions involves more of the same things that have caused the woes, but liberals just won’t let themselves see that. In their minds, the possibility that America’s economic woes are a direct consequence of the welfare state (and warfare state) just doesn’t occur to them. In their minds, the welfare state is a permanent feature of American life and represents all that is good with America and, therefore, could not possibly be the source of the bad things that are occurring.

So, all the liberal solutions involve big-spending, big-regulation proposals, the very things that are the root of the welfare state (and warfare state).

Many of the liberals, for example, are harkening back to the New Deal, FDR’s socialist-fascist program that transformed American society from one based on economic liberty to one based on the welfare-state, regulated-economy way of life.

Some liberals are saying, “Look at all the great things that FDR did — at the highways, the dams, and other big socialist projects. He put people to work!” And then the liberals cry, “This is what we need in America today: big public-works projects that bring growth and full employment to our land.”

Other liberals are saying, “The Federal Reserve should inflate the currency. This is the key to priming the pump and getting the economy humming again. This will bring growth and full employment.”

Others are exclaiming, “Go to the malls and spend your money so that we can have growth and full employment”

Other liberals are crying, “Tax the rich so that we can continue to fund our welfare-warfare state.”

Still others are calling for laws that mandate full employment, as a way to bring growth to the economy.

Have you ever seen so much statist nonsense in all your life?

Consider Cuba, for example. There is a reason that liberals consider Cuba to be paradise. It represents every liberal solution that is now being prescribed for our country.

In Cuba, full employment is mandated. In fact, there is no unemployment in the country because everyone works for the government. Imagine: full employment guaranteed.

There is also Social Security and Medicare in Cuba. And free education. Just like the statists have brought here to the United States.

Cuba also has big public (i.e., government) projects, sort of like a permanent New Deal.

Cuba also has irredeemable paper money that its Federal Reserve prints up on demand, to get the economy humming and bring growth to the economy.

And Cuba long ago taxed the rich to give their money to the poor. In fact, everything was taken from the rich and given to the poor, a liberal dream-come-true.

Today, everyone in Cuba has free Social Security, Medicare, and education, everyone has a guaranteed job, and there are no Bill Gates-type rich people.

Do you see why liberals love Cuba so much? Like I say, a liberal paradise.

Oh, did I mention that most everyone is desperately on the edge of starvation? Oh well, at least everyone is equal in the sense of being equally poor.

What liberals do not understand is how wealth is created in a society. They just think that wealth is a natural, permanent condition in a society. They see wealth and think they can confiscate and redistribute it and that it will continue to regenerate itself forever.

The key to a wealthy and prosperous society lies in savings, not spending — in the accumulation of capital. As savings increase, businesses are able to borrow the money to purchase tools and equipment that make workers more productive. As productivity goes up, revenues and profits increase to the firms. Workers get higher wages — higher in real purchasing power.

That’s how people become wealthy and how nations become wealthy. That’s how the United States became wealthy. Imagine: more than 100 years in American history without income taxation, inheritance taxes, and capital gains taxes. And more than a hundred years without welfare state programs, including Social Security and Medicare. More than a century without a warfare-state empire around the globe. More than 100 years of sound money — gold coins and silver coins — and no Federal Reserve.

Then along came FDR and statism. Seeing all that wealth was too much for the statists. Envy and covetousness got the best of them. They decided to take it away from the rich and give it to the poor.

In the early years, everything appeared hunky dory. There was lots of money to confiscate. As the decades went on, however — and as the warfare state was added to the welfare state — the spending grew and grew, ultimately surpassing tax revenues, causing U.S. officials to begin borrowing the money to cover the difference.

As the debts grew, the Federal Reserve was called on to pay back the debts by inflating the currency — printing the money. By this time they didn’t need to worry about people demanding gold for their notes because liberal icon FDR had made it a felony to own gold, what had been the official money of the United States since the founding of the republic. It’s not a coincidence that the dollar is worth about 5 percent of what it was worth in 1913, when the Fed was established.

And things just keep getting worse and worse. The burden of the welfare-warfare state way of life is becoming too heavy for the private sector to handle. That’s what’s caused Greece to crater. That’s where the United States is headed.

But liberals just won’t admit it. They cannot conceive that their beloved welfare state (and warfare state) is the root of the problem. They say that the problem is with the private sector. It needs to be taxed more, regulated more, controlled more. They won’t openly admit it, but Cuba is their goal.

The statists are taking us down with their statism. They’re destroying our wealth, our money, our standard of living, our economic well-being, and, most important, our freedom.

The only thing that can stop these people is libertarianism, not some reformed, warmed-over version of statism. That’s why we libertarians must continue battling against the statism that afflicts our land. We’re the only hope there is for saving our country, ourselves, and our families from these people.
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Jacob Hornberger is founder and president of the Future of Freedom Foundation.