The Future of Our Economy

In the last few weeks, there hasn't been very much discussion on the economy. Maybe that's because the media has been busy talking about pirates, handshakes, and flu outbreaks. Or maybe it's because it makes people uncomfortable.

Uncomfortable news sells, but not when it's boring. But in case you haven't been following the condition of the economy, it does not look good.

Lawrence Summers, director of the White House National Economic Council, said to expect worsening conditions.

In 2009, the economy is expected to shrink by 2.8 percent. By 2010, unemployment is supposed to reach over 10 percent and the economy is not expected to grow at all.

While this is obviously undesirable, it is necessary. This is the correction the market needs, and it's not good for those who have to suffer through it.

It's too bad that people are begging for help from the people who started this mess. The government is going to introduce policies which will further weaken our economy.

These polices have already started. The government is trying to prop prices up, weakening the dollar, and digging us deeper into debt every day.

In order to keep prices from falling, wages will be kept high by minimum wage laws, unionization will be encouraged, and inflation will continue to rise. With this inflation, more people will be eager to ditch the dollar as its value plummets, and this debt has to be repaid at some time.

Since this money comes from the private sector, expect the productive area of the economy to drastically decrease.

These are all steps in the wrong direction.

In 1920, America had its most severe depression it has ever seen. Banks and businesses failed at an astonishing rate and aggregate production dropped by 20 percent within only months. I bet you never learned about this in history class. That's because it only lasted one year.

Our greatest depression fighter ever was Warren Harding, the most underrated president in our history. As the last president refused to adopt Keynesian economics, he did the exact opposite of what we are doing now. He did absolutely nothing.

Harding let banks and businesses fail. All of them. No bailouts, no worker programs, and no inflation. He did nothing, and the depression was over within one year.

You can learn a lot from history, especially when it comes to economics. What we need is a Warren Harding, not Franklin Roosevelt who let a depression last for a decade by his reckless Keynesian policies. Unfortunately, we are stuck with politicians who are following in Roosevelt's footsteps.

Expect things to continue getting worse. Until we have real change, this downward spiral will continue. My guess is that this depression (yes, I said depression) will continue for years. So sit back, and watch our wonderful leaders fail time after time again while searching for the policy.

And by right policy, I mean whatever gets them reelected.