freemarkets

Here is a good read making the free market case in opposition to the Obama economic plan. The article written by John Tamny of H.C. Wainwright Economics provides an important lesson in economics and the damage caused by ineffective and damaging government intervention.   Government moving wealth around, the essence of the Obama tax plan disguised as tax credits will stifle demand and not serve as a vehicle of economic growth.  Tamny points out that since no change in wealth will result from the Obama tax policy (unlike what would be the result of an across the board real tax rate reduction) it merely is a punitive measure aimed at the producers and achievers in favor of the non-producers and non-achievers in the economy. John Tamny's supporting argument as to why he believes that the Obama plan will result in slowing economic recovery is based in part upon the crowding out theory. Since government debt is now at historic levels both in real dollars and in percentage of the GDP less money can be made available for the sort of entrepreneurial activity which drives economic growth. The Obama plan at every turn takes decision making away from the private sector and replaces it with government redistribution and allocation of hard earned dollars.  The American people still have the ingenuity, creativity, and innovative spirit needed to lead the world economy if only the government will not stand in the way and not interfere with the free market's invisible hand.However, this time unlike in other recession and recovery cycles, the US government is now part owner of some of the biggest names in the financial sector and the auto sector due to billions of dollars in debt buyouts meaning, Uncle Sam sits on the boards of these companies that were bailed out. That debt belongs to all of us yet we have little to no say in demanding that those companies now partly owned by the taxpayers shape up.  Tamny points out the truth proven time after time that left alone, companies or industries are reorganized and that the bailouts are "... delaying the process whereby people and capital are managed productively. "

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hat tip to http://www.997wtn.com/custpage.cfm?frm=9347&sec_id=9377 Ralph Bristol's Nashville's Morning News, WTN 99.7

Ralph interviews John Tamny on Friday mornings.

John Tamny is editor of http://www.realclearmarkets.com (RealClearMarkets), a senior economist with H.C. Wainwright Economics, and a senior economic advisor to Toreador Research and Trading (www.trtadvisors.com). He can be reached at jtamny@realclearmarkets.com.

http://www.realclearmarkets.com/articles/2009/01/obamas_economic_solutions_are.html

Obama's Economic Solutions Are Contractionary  By John Tamny