Month: July 2017 – י״ט בתמוז תשע״ז

Zehut: The Lesser Socialists

Moshe Feiglin: Israel Doesn’t Need a Shot of Socialism

Nov-22-2015

The more capitalistic a country is – in other words – the less regulations, laws and rules that govern it – the higher the per capita income of the lower percentiles of that society,” said Moshe Feiglin on Sunday. Feiglin quoted Economist Gilad Alper with the following statistics:

When the states of the world are divided into four groups according to their level of capitalism, it turns out that the annual per capita income of the lower percentiles of the most capitalist states is approximately $10,000. This is more than twice the annual per capita income ($4400) in the same percentile in the states that are rated as second in capitalism. The $10,000 is almost four times more than the group of states rated third in capitalism ($2600) and six times more than the least capitalist states, in which the per capita income for the lower percentile is $1630. In short, capitalism leaves a lot to be desired, but the way to treat its illness is not by administering a shot of regulation and centralization. What is needed is just the opposite.

To heal the ills in Israel’s economy, Feiglin recommended the implementation of the following steps:

  • Expose the market (particularly food and motor vehicles) to competitive imports. (The European quality standards are fine: Israel does not need its own quality standardization.
  • Privatize state land (93%) for housing by lottery for all citizens eligible for army draft.
  • Drastic cuts to government offices and state budget.
  • Nullify the Company Tax and encourage companies to create more places of work with their profits.
  • Major cuts to income tax.
  • Fight the swamps of corruption, particularly in the Defense Ministry (as I began to do with the Health Ministry and the Sarel Company when I was an MK)
  • Cease funding our enemies. For example, stop the free electricity to Gaza. (So far , the Oslo Accords have cost Israel one trillion shekels. This is 10% of our annual budget, the same value as all Israel’s natural gas discoveries. Or the value of a free home for every young couple.)
  • Restore the Social Security Army Veteran’s Allowance. (Currently, 52% of Israel’s Social Security is invested in the Arab sector. Their payments into social security, however, make up just a few percentage points.
    In short, Israel must cut down on the involvement of the State and expand human liberty as much as possible.

“Ask yourselves to which group you would like Israel to belong,” Feiglin suggested. “To the group in which the poorest of the poor make $10,000 a year? Or to the group in which the poor make less than half of that?”

From Jewish Israel, here.

America’s Next Depression: Right on Schedule

Janet Yellen: False Prophet of Prosperity

By 

Ron Paul Institute

July 12, 2017

Federal Reserve Chair Janet Yellen recently predicted that, thanks to the regulations implemented after the 2008 market meltdown, America would not experience another economic crisis “in our lifetimes.” Yellen’s statement should send shivers down our spines, as there are few more reliable signals of an impending recession, or worse, than when so-called “experts” proclaim that we are in an era of unending prosperity.

For instance, in the years leading up to the 2008 market meltdown, then-Fed Chair Ben Bernanke repeatedly denied the existence of a housing bubble. In February 2007, Bernanke not only denied that “sluggishness” in the housing market would affect the general economy, but predicted that the economy would expand in 2007 and 2008. Of course, instead of years of economic growth, 2007 and 2008 were marked by a market meltdown whose effects are still being felt.

Yellen’s happy talk ignores a number of signs that the economy is on the verge of another crisis. In recent months, the US has experienced a decline in economic growth and the value of the dollar. The only economic statistic showing a positive trend is the unemployment rate — and that is only because the official unemployment rate does not count those who have given up looking for work. The real unemployment rate is at least 50 percent higher than the manipulated “official” rate.

A recent Treasury Department report’s called for rolling back of bank regulations could further destabilize the economy. This seems counterintuitive, as rolling back regulations usually contributes to economic growth. However, rolling back bank regulations without ending subsidies like deposit insurance that create a moral hazard that incentivizes banks to engage in risky business practices could cause banks to resume the unsound lending practices that were a major contributor to the growth, and collapse, of the housing bubble.

The US economy is already faced with several bubbles that could implode at any time. These include bubbles in student loans and automobiles sales, and even another housing bubble. The most dangerous of these bubbles is the government bubble caused by excessive spending. According to a 2016 study by the Mercatus Center, at least four states could soon join Puerto Rico and Illinois in facing bankruptcy.

Of course, the mother of all government bubbles is the federal spending bubble. Despite claims of both defenders and critics of the president’s budget, neither President Trump nor the Republican Congress have any plans for, or interest in, reducing spending in any area. Even the so-called cuts in Medicare and other entitlement programs that have generated such hysterics are not real cuts, but “reductions in the rate of growth.”

Some fiscal conservatives are praising the administration’s proposal to finance transportation spending via government bonds. However, the people will eventually have to pay for these bonds either directly through income taxes or indirectly through the inflation tax. Government-issued bonds harm the economy by diverting investment capital away from the private sector to the “mixed economy” controlled by politicians, bureaucrats, and crony capitalists.

If Congress continues to increase spending and the Federal Reserve continues to facilitate that spending by monetizing the debt, Americans will face an economic crisis more severe than the Great Depression. The crisis will likely result from a rejection of the dollar as the world’s reserve currency. Those of us who know the truth must redouble our efforts to ensure a peaceful transition away from the Keynesian system of welfare, warfare, and fiat currency to a society of peace, prosperity, and liberty.

From Lewrockwell.com, here.