Ryan ChartrandLooking into the crystal ball of the American economic future is a frightening prospect for a college student with less than a year until graduation.
Exactly what kind of economy are we as young Americans inheriting and where will we stand in the world marketplace in a few years?
More importantly, will we – as the country’s future entrepreneurs, innovators and workers – be allowed our chance at the American Dream? Will the United States still be the shining beacon of free enterprise and industry by the time the government is through?
The outlook doesn’t look pretty.
Since March, the Federal Reserve has bailed out investment bank Bear Stearns, essentially nationalized mortgage giants Freddie Mac and Fannie Mae and taken over insurance giant AIG – all at the expense of innocent taxpayers.
Operating in full crisis-control mode, it now looks to further expand its regulatory powers and give the Fed unprecedented power to nationalize companies and regulate industry – at the cost of a proposed $700 billion bailout for ailing Wall Street firms.
When does it end?
Certainly not on November 4.
Although the economy has supposedly been the presidential race’s hot-button topic, hope is not imminently on the horizon.
Sen. Barack Obama tentatively backs the proposed bailout legislation, but is also in favor of taxing private industry more. In addition to the $700 billion bailout, he also wants to tack on a $115 billion economic “stimulus” package and tax breaks for the middle class (where does all this money come from?).
He went on to say that he wouldn’t support giving a “blank check to Washington with no oversight and accountability when no oversight and accountability is what got us into this mess in the first place.”
But “oversight” of financial markets is not the solution to our economic problem; it’s the root cause! The legislation on the table is presented as a cure for future meltdowns when in fact it’s just more of the same interventionist policy that landed us in hot water in the first place.
Sen. John McCain has yet to say if he backs the bailout or not and he seems tentative to do so in the face of conservative opposition, but chances are, he won’t fight furtively against the proposal if push comes to shove.
Obviously, neither of these guys get it and the majority of their fellow senators don’t either.
The housing bubble and the ensuing mortgage meltdown were themselves caused by the Federal Reserve. By keeping interest rates artificially low and driving inflation, it distorted the market and created the impression that houses and sub-prime mortgages were must-have investments. The mortgage and credit crisis that we’re now witnessing is simply that government-created illusion coming crashing down.
Isn’t it ironic that the Fed – the central planning institution that got us into this fine mess in the first place – is now expected to get us out?
The only way to let the American economy recover is to take away the Fed’s power to arbitrarily control the money supply and determine the price of credit.
Every Cal Poly student – every college student anywhere, for that matter – should be deeply concerned about the prospects of America’s economic future and the legislation our officials in Washington are milling over.
If this legislation passes, it will cost all of us massive amounts of money in taxes, it will increase our national debt and our liabilities to China, Japan and other large foreign holders of American debt, and moreover will set the precedent for further nationalization of private industry. It’s a slippery slope from there and it doesn’t bode well for those of us looking to enter the workforce in the middle of this mess.
America was founded on the capitalistic principle of free markets and minimal governmental interference. By the turn of the 20th century, young Americans just like us proved to be the leaders of the Industrial Revolution, and by the end of World War II, the United States had transformed itself from a rag-tag immigrant nation to the world’s economic powerhouse. In between, businesses failed, and no Federal Reserve came by to scoop them up.
Now, I ask only that my generation has the opportunity to continue to do the same. We’re not looking for a government to coddle us and we’re not looking for Ben Bernanke to plan our economy; we can run business and we’ll look after our own individual economic futures. And if the economy comes crashing down again, we ourselves will pick it up, just as long as the bureaucrats in Washington get out of the way.
Marlize van Romburgh is a journalism senior and the Mustang Daily editor in chief.