Economic mess likely to get worse

The current economic mess is likely to get worse before it gets better. The liberals are quick to blame the previous administration. It is important to recognize a few facts.

Most important for the collapse of the financial system is the huge accumulation of debt over the last 20 years, especially the bad debt which existed in the subprime mortgage market aided and abetted by Democrats Barney Frank and Chris Dodd and others.

This excess debt, especially the bad mortgage debt, has to be worked off. To its credit, the current administration, while ignoring their own party’s culpability, seems to be making some efforts to do so even though they are substantially misguided and are pandering to political interests.

The proposals put forth, both in the stimulus and the budget, are not likely to be successful because there is too much emphasis on simple disbursement of money and too little on reinvigorating business (the taxing elements will have the opposite effect of negatively impacting business). There is ample evidence of the failure of this current approach in the Great Depression and Japan’s policies in the ’90s.

I applaud Congressman Issa’s efforts of resistance to these policies in his attempt to get more favorable ones enacted.

There is an old axiom: “When you subsidize something you get more of it and when you tax something you get less of it.” This applies here. We should not be raising taxes on the job creators and subsidizing irresponsible behavior.

Glen Holzhausen