My Response To: "So What is Your Plan?"

I don’t have a plan. I am not a central economic planner.I do not believe in central economic planning.

The solution is to allow the market to work. A recession is also known as a “market correction”. The process will be much faster and smoother without government intervention.

George Reisman remind us that, “Recovery will be achieved by the combination of more saving, capital, and credit along with lower wage rates, costs, and prices." This credit is not produced by the alchemy of the Federal Reserve, but rather through the increased saving of individuals.

Again, compare the recession of 1920-1921 to the Great Depression in terms of length.

The current economic conditions were not caused by a lack of government regulations, oversight, involvement, and intervention. It was caused by too much government interference in the economy. The government (and the Federal Reserve) distorted market signals, large amounts of malinvestment occurred, and now we are witnessing the necessary market correction.

“Until we learn the lesson that government intervention cannot heal the economy, and can only do harm, we will never stabilize the economy or get on the road to true recovery.”Ron Paul 2/25/09

Richard Ebeling reminds us “The best pro-active policy the Federal government can undertake right now is to accept that its own past policies have caused the economic crisis we are in, and leave the market alone to rebalance itself and reestablish the basis for sustainable growth and employment in the years ahead.”

It is savings and capital accumulation that lead to economic growth and prosperity. Consumption is a function of the prosperity that is created by savings and capital accumulation. We can’t spend ourselves into prosperity. Ever.

As Ludwig von Mises stated, "The essence of Keynesianism is its complete failure to conceive the role that saving and capital accumulation play in the improvement of economic conditions."

Sheldon Richman reminds us that doing nothing is superior to doing the wrong thing. “The story is told that Ludwig von Mises was once asked, “Do you mean to say that the government should have done nothing during the Great Depression?” Mises responded, “I mean to say it should have started doing nothing long before that.” I hope the story is not apocryphal, because it perfectly sums up the government’s proper role in managing the economy: none...

The typical government interventionist response:“It would have been worse with government “stimulus” spending”, does not hold water. Once again, compare the recession of 1920-1921 to the Great Depression.