Geithner evades the real question

Centralized government economic planning. That is what we are moving towards right now. All of this talk issuing forth from Washington is essentially a power grab. The effort of those folks who work FOR us to protect our liberty are actually making an effort to make us more secure. As we know, Ben Franklin warned against trading freedom for security. He told us that when we make that trade, we will have neither.

I do not think that this administration has bad intentions. I think President Obama has the best of intentions. I do think he is very naive and too trusting of his successors. The problem is, if all of his plans for this country are enacted, it opens the door for a would be tyrant in the future who may wish to seize on this centralization of our economic planning and use it in ways that do not have the good intentions that President Obama may have.

There is no such thing as capitalism. It does not exist. It's a word that Karl Marx invented to contrast with his ideas of centralized economic planning.
No one invented capitalism as a theory, it just happened when men became free. They used to call this sort of thing a market economy. No planning, just the result of the freedom of people to buy and sell their own property, invest in the work of others, etc.

The problems we are now facing in our economy are not the work of a free economy. They are in fact, the reapings of what happens when the economy is manipulated by a central planner.

Let's go back to what began this mess. Easy credit. This was so easy because of government pressure on lenders to make more loans to people who were a higher risk. Couple that with low low interest rates pushed by the Fed, and suddenly anyone could borrow money. What caused the housing bubble was central planning all the way down the line from the low prime rates to government officials that supported the idea of no family left behind, encouraging anyone who had a pulse to get a new home regardless of the ability to pay the loan back. If you could sign on the bottom line, the central planners made it possible for you to get a house, or in some cases 2, 3, or more houses to flip. Large banks began amassing wealth from thin air just by making a loan. The credit bubble is basically a child of the housing bubble. A lot of money was riding on the housing bubble, despite the fact that up until 1979, the total net worth of all real estate was equal to the GNP. Now it is far exceeding the GNP, and that just can't be. If GNP is truly a measure of the wealth of a nation, then how can real estate be that much higher? Something didn't add up.
n 1995, the psudo-government/private agencies Fannie Mae and Freddie Mac began receiving government incentive payments for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the GSE with the subprime market. Subprime mortgage originations rose by 25% per year between 1994 and 2003, resulting in a nearly ten-fold increase in the volume of subprime mortgages in just nine years. Also, the U.S. Department of Housing and Urban Development's (HUD) mortgage policies fueled the trend towards issuing risky loans.

This is really just the tip of the iceberg. Central planning is the problem. It's meddling into the economy in order to help the low income has shown what happens and what unintended consequences are possible when central planning is involved.

Personally, I prefer the solution that is offered in the video below. The administration and MSNBC are lying to you when they tell you that alternative solutions to our current problem are not being offered up. MSNBC is too worried about uncovering the "crimes of the Bush administration" to pay attention to anything that is happening right now. They are serving up Kool-Aid in place of actual journalism.



Let freedom ring, not central planning. For those of you who say:
"You are forgetting those evil unregulated Credit Default Swaps, and the other inventions by wall street that helped caused this mess".
My only statement to you is this. If the Government did not get involved in the first place, there would never have been so many sub prime loans made, and there would be a lot less defaults of this easy credit to be swapping to begin with.