Heritage Chart of the previous stimulus.

Here's a neat chart done by the Heritage Foundation showing how stimulus checks last year hardly did anything. They echo what DownSizeDC has said. One time boosts to income don't make people feel comfortable about spending more. It's only a permanent increase in income that makes people feel more like spending. That's why permanent tax cuts for all people paying income taxes is the best way to encourage spending and investment.

Below is their chart showing statistics about the 2003 tax cuts.


As a related side note, I just want to reiterate that the results of the Revanue Act of 1932 shows that higher taxes hurt the economy. Click here for a history of the Great Depression, which shows that while there was slow sustained growth up until 1937, the economy had another recession and only picked up more perminantly when the conservatives got rid of most of the "New Deal" and finally got rid of all of it accept Social Security by 1947.

Also interesting: click here for a relatively short history on how the United States income tax came to be.

In Love and Liberty,
from Bergen, Hordaland, Norge,

Christopher D. Osborn

Newly Educated Fred Thompson?

Here we have a fairly new video of Fred Thompson mocking the liberal idea that spending and printing money and not saving will save us all:

On the other hand, we have him below mocking Ron Paul on these very same issues.  



I want to know, is Sen. Thompson newly educated, or is he just acting?  If it's not just acting, I would love to see him join Ron Paul's Campaign for Liberty, or perhaps donate to Downsize D.C.

Also, here's a messege from Tom Dyson of Daily Wealth:

The Stupidity of Government Intervention
By Tom Dyson

The only other time I'd ever seen this was in my school history books, learning about the Great Depression...

In September 2007, Britain's most overleveraged mortgage bank – Northern Rock – asked the government for an emergency loan. When its customers heard the news, they rushed to the nearest branch of Northern Rock to withdraw their savings. They formed queues around the block.

The next day, the government announced it was guaranteeing Northern Rock's deposits, and the panic went away. Then a funny thing happened...

Suddenly, people started draining money from all the other banks in Britain and depositing it at Northern Rock!

The government intended to make the financial system stronger by shoring up Northern Rock. But it made the financial system weaker by undermining the financial strength of all other banks. In the end, the government ended up nationalizing the whole system.

The same thing happened in Ireland. It was the weakest financial system in the euro-zone. Then it guaranteed all its deposits. All the money in Europe started flowing into Ireland. This weakened the banking systems in the other European countries, and they had to guarantee their bank accounts, too.

In the United States, the government is doing everything it can to help homeowners stay in their houses. These people couldn't afford their houses in the first place, but the government wants to keep them happy. So it won't let the banks foreclose their properties, and it's making banks reduce the principal on the loans.

Would you lend money to a home buyer knowing the government won't let you take the house if he doesn't pay you... or that the borrower doesn't have to pay the whole loan back? No way. Not unless you could charge an astronomical interest rate. The government won't let you do that either. Government regulations cap the interest rates you can charge on a mortgage.

So the government thinks it's helping unfreeze the credit markets. But it's actually making them worse.

Here's the point: Government intervention makes the whole system weaker.

Intervention kidnaps money that would otherwise be available to businesspeople and entrepreneurs... and it invests it in places that businesspeople and entrepreneurs would never put their money... like uncompetitive car companies or failed banks. Then it creates unintended consequences that make everyone poorer.

Government stimulus does not stimulate, it stifles. So when you look at the current levels of government intervention all around the world... India, Australia, China, Taiwan, Britain, Europe, and the biggest of all in America... you have to conclude it will lead to the biggest loss of productivity ever.

When the government controls an economy's financial decision-making, no one makes any money. This is why the government interventions haven't had any effect so far. It's also why stock prices will fall to valuations far lower than at normal bear-market bottoms of the past few decades.

So I'm not ready to call a bottom in the stock market. I'm only willing to buy a stock if it has a balance sheet with no debt, it generates tons of cash flow from selling a simple product, and it pays a dividend I know cannot be cut under any circumstance.

Besides that, I'm sticking to gold and cash.

Good investing,

Tom

Happy New Year Everybody!

From Bergen, Norge,

Christopher D. osborn

History Rymes

---------- Forwarded message ----------
From: Downsizer Dispatch <downsizer-dispatch@downsizedc.org>
Date: Thu, Nov 13, 2008 at 6:57 PM
Subject: Mark Twain was right
To: mvfipher@gmail.com

D o w n s i z e r - D i s p a t c h

---

Quote of the Day: "History doesn't repeat itself, but it does rhyme." -- Mark Twain

Subject: Educate the Powerful!

Mark Twain was right. History doesn't repeat itself, exactly, but often the present does rhyme with the past.

Sadly, the evidence for this is now all around us.

Too much of what the politicians are currently doing rhymes too well with what the politicians did during the Great Depression.

Then, as now, the politicians blamed the economic downturn on the free market. They were wrong then, and they are wrong now.

The government caused the Great Depression. Even Ben Bernanke, the Chairman of the Federal Reserve, agrees. Here's what he said at the celebration of Milton Friedman's 90th birthday in 2002 . ."I would like to say to Milton (Friedman) and Anna (Schwarz): Regarding the Great Depression. You're right, we did it."

Predictably, government schools don't teach this view. Instead, they teach that . . .

The depression became Great because President Hoover was an advocate of laissez-faire economics who did nothing to intervene. In fact, Hoover was the first president to ever make major interventions in the economy.

The economist Bryan Caplan lists 21 Hoover interventions.

Another economist, Murray Rothbard, has described how President Hoover was the true creator of the "New Deal" approach for which FDR later claimed dubious credit.

Caplan and Rothbard are not alone in this. Roosevelt aid Rexford Guy Tugwell was to say years later . . .

"We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started." (Source: Paul Johnson, A History of the American People -- New York: HarperCollins Publishers, 1997, p. 741)

Even FDR himself agreed that Hoover had intervened, he just disagreed with the interventions. During the 1932 presidential campaign Roosevelt repudiated Hoover's meddling, saying . . ."The doctrine of regulation and legislation by 'masterminds' ... has been too glaringly apparent at Washington during the ."

And during the 1932 presdiential campaign Roosevelt constantly criticized Hoover for his huge deficits, promising instead . . .

* "immediate and drastic reductions of all public expenditures"
* "abolishing useless commissions and offices, consolidating bureaus and eliminating extravagances"
* "reductions in bureaucracy"
* Implied tax cuts
* And a "sound currency to be maintained at all hazards."

We aren't taught that Roosevelt promised these things. Instead, we're taught that FDR's heroic interventions saved the free market from itself.

But what did his interventions actually achieve?

* The depression became Great under FDR's guidance.
* It lasted more than a decade.
* Prosperity never returned while he was President.
* The economy only recovered after Roosevelt was dead and buried

Even FDR's own economic team knew that his New Deal interventions had been a complete failure. Here's what FDR's Treasury Secretary, Henry Morganthau, admitted to Congress in May, 1939 . . .

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"

It's significant that Hoover and Roosevelt were the first to intervene in the economy. Previous downturns had always been allowed to run their course, lasting from a few months to a couple of years. But the first one the politicians tried to stop is the one that lasted more than a decade, and that really hit hard.

If government intervention worked, then why did the 1929 depression become Great, when none had before?

It ought to make you angry. The injustice is so clear. The politicians caused the problem, blamed it on the free market, and then benefited from the disaster they had created by grabbing vast amounts of power and money.

And now it's happening again. History, sadly, is rhyming.

We're being told that the economic downturn resulting from the housing bubble is a market failure, and that massive government intervention is needed in all directions. But the truth is this . . .

* Government housing policies and easy credit from the Federal Reserve caused the housing bubble.
* Companies and individuals who made bad decisions based on these policies should pay the full price for their mistakes
* None of them should be rescued
* The politicians should not intervene

In short, the politicians should stop pursuing policies that rhyme with those pursued during the Great Depression.

In addition, the advocates of Big Government should be asked . . .

* Why, precisely, was the first economic downturn in which the government intervened the only one that became so bad that it earned the name of the Great Depression?
* And why is it, precisely, that the major areas of American life where the government has intervened to make things more affordable -- such as health care, higher education, and housing -- are exactly those areas where costs have risen the most?

Government intervention does not work. It does not make things more affordable, it makes them more expensive. It does not prevent economic downturns, it causes them, and deepens them.

Please use our Educate the Powerful System to tell your elected representatives to stop the bailouts, NOW.

And then do something to make them smarter . . .

Paste this Dispatch into the section for your personal comments and send it to them. Maybe there are a few Congressional staffers who will learn something.

Thank you for being a part of the growing Downsize DC Army.

Perry Willis
Communications Director
DownsizeDC.org, Inc.

D o w n s i z e r - D i s p a t c h
is the official email list of DownsizeDC.org, Inc. & Downsize DC Foundation

CONTRIBUTE to the Electronic Lobbyist project

http://www.DownsizeDC.org is sponsored by DownsizeDC.org, Inc. -- a non-profit educational organization promoting the ideas of individual liberty, personal responsibility, free markets, and small government.

You are encouraged to forward this message to friends and business associates, and permission is hereby granted to reproduce any items herein as long as attribution is provided for articles and the subscription instructions above are included.