Quotes

"Fascism and communism both promise "social welfare," "social justice," and "fairness" to justify authoritarian means and extensive arbitrary and discretionary governmental powers." - F. A. Hayek"

"Life is a Bungling process and in no way educational." in James M. Cain

Jean Giraudoux who first said, “Only the mediocre are always at their best.”

If you have ten thousand regulations, you destroy all respect for the law. Sir Winston Churchill

"summum ius summa iniuria" ("More laws, more injustice.") Cicero

As Christopher Hitchens once put it, “The essence of tyranny is not iron law; it is capricious law.”

"Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan

"Law is where you buy it." Raymond Chandler

"Why did God make so many damn fools and Democrats?" Clarence Day

"If I feel like feeding squirrels to the nuts, this is the place for it." - Cluny Brown

"Oh, pshaw! When yu' can't have what you choose, yu' just choose what you have." Owen Wister "The Virginian"

Oscar Wilde said about the death scene in Little Nell, you would have to have a heart of stone not to laugh.

Thomas More's definition of government as "a conspiracy of rich men procuring their own commodities under the name and title of a commonwealth.” ~ Winston S. Churchill, A History of the English Speaking Peoples

“Laws are like cobwebs, which may catch small flies, but let wasps and hornets break through.” ~ Jonathon Swift

Sunday, November 14, 2010

Tale of Two Economies- Public vs. Private

The Best of Economic Times, and the Worst | The Weekly Standard

12:00 AM, NOV 13, 2010 • BY IRWIN M. STELZER
This is a tale of two printing presses.

It is the best of times, the worst of times. The U.S. government will continue spending more money than it is taking in from taxes, despite a warning from the president’s budget commission that the situation is unsustainable and risks a blow-out in the market for U.S. IOUs. The worst of times. So the first printing press well be put to work printing Treasury bonds, or IOUs, promises to repay the loans at some future date, and interest until then.

Meanwhile, the Federal Reserve Board’s monetary policy committee will activate the second press, and not for the first time. It will print $600 billion with which to buy the next eight-months’ output of the Treasury’s presses, and that doesn’t count the $300 billion from expiring mortgages that it will reinvest in additional Treasury securities. That will keep the price the Treasury has to pay investors -- the interest rate -- low, and drag down other interest rates as well.

Which makes investors look for a better return on their money. Buy shares. Not much of a risk since the chairman of the Fed, Ben Bernanke, has announced that since share prices add to wealth, added wealth results in added spending, and added spending creates jobs, he will support share prices -- the so-called Bernanke “put.” The best of times.

Voila! Investors bid up share prices and, according to an estimate by the Lindsey Group, Americans were instantly $2 trillion richer than a few months ago, making it likely that the GDP will increase by a non-trivial 0.4 percent more than it otherwise would. Surely, the best of times, the age of wisdom rather than of foolishness.

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