Monday, July 11, 2011

A Federal Reserve Bank Position is Bachmann's Acid Test

I spent a few minutes Googling +Michele Bachmann +"Federal Reserve Bank" and found little. Bachmann's website says that she is for cutting government and debt, but, like the fatuous debate about the Glass Steagall Act, saying you are for cutting taxes is beside the point. (The Glass Steagall Act is a matter of irrelevance to the bubbles that have riddled the American economy since the establishment of the Federal Reserve Bank.) Ronald Reagan said he was for cutting taxes, but through supply side cum Keynesian economics he created a thirty-year bubble whose bursting we now see. Bachmann says that she is for less debt, but Reagan said he was for less government; he did not really cut government (his increases in defense spending compensated for his cuts in domestic spending).

In short, the Republicans have lied for 30 years. They have repeatedly said that they favor small government and free markets, but there was no significant reduction in government or in regulation during any of the Republican administrations. George W. Bush expanded government, setting the stage for Obama's return to the pre-Reagan government expansion pattern.

The only way to limit government is to prevent money-printing.  This would have the side effect of forcing some manufacturing back to the United States as the treasury bonds that are currently used by foreign banks to prop up the dollar would not be issued with the current profligacy. In turn, stock markets and Wall Street as well as government would shrink.  The mess that a century of Progressivism has created would begin to be sorted out. It would not be pleasant, but if we do not do something now there will be worse hell to pay when the dollar finally collapses.

Bachmann is smart enough to have ideas about the Fed, but her Website seems to be silent, and she has not responded to my earlier letter. Unless she is willing to discuss a policy that would contain or eliminate the Fed, her small government credentials are bogus.  She is another Progressive masquerading as a friend of small government.

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