September 1, 2010
Last week’s SEC rule opening public company proxies to Director nominations by minority shareholders is another example of a march to compromised capitalism, a condition where every priority other than profit earned in a free market dominates the corporate agenda and is subject to undue influence. We should defend free market capitalism and the profit motive, for ultimately we depend on these principles to provide economic growth, employment, and security.
Increasing employment, paying off deficits, and meeting private and public retirement obligations requires decreases in government spending and increases in private economic activity and private wealth. Yet every important action by our political leadership contributes to the exact opposite result.
Federal debt has increased from $3.4 trillion in 2000, to $6.0 trillion in 2005, to an estimated $9.0 trillion in 2010, and to $16.0 trillion in 2020 based on assumptions that the economy will experience a recovery because it has always recovered before.
The Federal government borrows $787 billion dollars for “stimulus” spending, much of which has a onetime impact but which imposes more debt and interest payments on all Americans, our children, and grandchildren.
The Federal government enacts 2,454 pages of health care legislation that will cost us at least another trillion dollars while driving us toward nationalized health care without even trying market based reforms that would hold providers accountable to each of us for access, prices, and improve the quality of care while motivating continual health care innovation.
The Federal government enacts 2,464 pages of financial legislation (and here) dramatically increasing the regulation of risk in the financial industry while failing to address the ongoing risks of Federal guarantees for home mortgages. Federally guaranteed mortgages total $5 trillion of which $148 billion is currently considered bad debts to be borne by taxpayers (that would be you and me).
The Federal government is planning to increase taxes on dividends, interest, capital gains, and earned income for the highest earning, most productive taxpayers, investors, savers, and consumers beginning January 2011.
The national unemployment rate remains near 10% for those seeking jobs and above 16% including those not bothering to look.
Economic growth is less than 2% and what growth there is results largely from money borrowed for “stimulus” spending. The government tells us over $500 billion of “stimulus” spending has been paid out to an economy that generates $13 trillion dollars of goods and services annually. Where does the next “growth” come from?
State public pension and retirement health care obligations are one trillion dollars in the hole nationally and no one representing these interests seems willing to lessen the costs of this security blanket; a security blanket (or is it a time bomb?) again guaranteed by more debt and interest payments from all Americans, our children, and grandchildren.
Shall we also mention unfunded Federal Medicare and Social Security liabilities?
Virtually all Federal legislation and regulation enacted over the past 18 months (as well as much that preceded it and that is contemplated) greatly expands the Federal deficit, increases taxes, regulatory costs, and uncertainty, and fails to address already unsustainable retirement liabilities. The result discourages work, risk taking, and investment, and drives down the value of private enterprises whose worth we depend upon to fund retirement costs, and whose health we rely upon to generate real economic growth and increasing employment.
Do you want a better job or any job at all? Do you want to secure your retirement benefits and the value of your savings? Do you want a future where your children have more opportunities than you were afforded? If so, support free market capitalism and the profit motive.