Wednesday, September 3, 2014

The dilemma of the business cycle

The normal business cycle for any economy calls for regular periods of recession, trough, recovery, and peak or boom.  When an economy falls into a recession there is usually a specific reason for it.  Today, unlike in the past, when a recession occurred there was an investigation into what caused the recession, and efforts made to fix it.  This has not been done during many of our recent recessions, and the result has been an assault on personal liberties.

Think about it.  The reason the recent recession started was because of an artificial housing bubble caused by governmental programs that encouraged people to buy houses who couldn't afford them. Anyone with an economics 101 education knows that such a strategy is unsustainable.  

Yet instead of considering this actual cause, the government tried to bail out banks and businesses that failed as a result of these bad policies.  And instead of ending the bad policies and allowing the economy to naturally rise, the recession is prolonged.  Such policies were enacted by Herbert Hoover and Franklin D. Roosevelt in the 1930s, by Jimmy Carter in the 1970s, and again by George W. Bush and Barack Obama in the 2000s.  Instead of pulling us out of a recession their policies only prolonged it.  

As a matter of fact, it almost seems as though progressives tend to use recessions as an excuse to push forth their agenda.  Instead of reducing regulations and taxes, they pass laws that create more government programs and raise taxes to force people to pay for them, thus taking away liberties in the process.  Yet such strategies merely prolong recessions rather than end them.