Peter Schiff on The Daily Show
June 10, 2009 by Miranda Marquit
Filed under Finance
While I agree with some of the economic stimulus measures that President Barack Obama is trying to implement, I do not agree with all of them. More specifically, I am not happy with the continued focus on credit as the engine of our economy. I have written several posts about the disconnect between what’s good for the economy (consumer debt) and what’s good for our individual finances.
The policies adopted beginning in the years of Reagonomics, on up through Bush, Clinton, Bush II and now, Obama, are aimed at explosive economic growth that is unstable and unsustainable. Not to mention the “economic stimulus” designed to put off the natural down cycles, lest they happen during a specific president’s term. So it is no real surprise that I agree with a lot of what Peter Schiff said last night on The Daily Show. Do you?
Peter Schiff has been right on in his macro-economic forecasts, but little better than average in his investment advice. If you believe what he is saying, gold and commodities are the place to be, and perhaps non-dollar denominated securities.
To quote Schiff:
“Obama carefully peppers his speeches with calls for Americans to live within their means, to save more and spend less, to produce more and consume less. But nothing in the government’s current fiscal or monetary policy will encourage such behavior. In fact, the objective of economic stimulus is to prevent such changes from taking place!
The laughter of Chinese students that greeted Secretary Geithner at Peking University shows how ridiculous this spiel sounds overseas. Actions speak louder than words, and the actions of the current Administration are deafening. Multi-trillion dollar deficits, bailouts, nationalizations, quantitative easing, and grandiose plans for government-provided healthcare, education, and alternative energy, render all their claims of future prudence meaningless. If our leaders will not make tough choices now, why should anyone believe they will do so later when those choices will be even harder to make?
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In the meantime, by continuing to lend, our creditors merely supply us the shovels to dig ourselves into an even deeper economic hole. Their credit enables our government to grow when it needs to shrink, finances bailouts of companies that should be allowed to fail, and enables a nation that should be saving and producing to continue borrowing and spending. As a result, the more money the world loans us, the less capable we are of paying it back. I really wish the world would stop doing us favors, as neither party can afford the consequences.
For an timely example, just look at California. With an unmanageable $20 billion deficit, California recently asked Washington for a bailout. With none immediately forthcoming, California was forced to make real and needed budget cuts. The hard choices, which will benefit California in the long run, would not have been made if federal funds had been committed. We all should be so lucky.”
I think this guy is really onto something. Is anyone else hearing the wake-up call? I think this is the change we can believe in, not the phony, dim-witted stuff coming out of Washington. If I lived in Connecticut, I’d vote for him.