The Economy

"A free and competitive market allocates resources in the most efficient manner. Each person has the right to offer goods and services to others on the free market. The only proper role of government in the economic realm is to protect property rights, adjudicate disputes, and provide a legal framework in which voluntary trade is protected. All efforts by government to redistribute wealth, or to control or manage trade, are improper in a free society." - Libertarian Party Platform, Section 2.0 (adopted: May 2008)

Bailouts

Everybody is looking for a handout.

Politicians looking to appease their nervous constituency, interest groups (both from the United Auto Workers and those representing Big Automotive) looking for a handout and know-nothing political pundits looking for a juicy story will all tell you this is necessary for the economic well being of the nation.

In this time of economic turmoil, it's easy to suggest government has the answers, especially when it is backed by sweet-sounding rhetoric and promises of better times. For those that don't know the historical failures of government intervention in the market, it just might sound good enough to swallow.

However, like most government programs, the reality is far, far different from the rhetoric.

Bailouts are ALWAYS bad for the taxpayer, for the economy, and for business. Why? Because rewarding the mismanagement of American corporations with a taxpayer-subsidized lifeline does NOTHING to encourage reform or fix the problems that pushed the companies to the brink of failure. As we said in a recent statement, these bailouts do nothing but prolong the inevitable collapse of companies suffering from extreme mismanagement and poor investments.

This is especially true in the case of automotive companies.

Detroit auto manufacturers have failed to keep up with trends in the automotive industry, locked themselves into destructive union contracts and demonstrated a complete lack of initiative in automotive innovations that make their products enticing to consumers.

Why are taxpayers being used to reward this mismanagement?

This is why Daniel J. Mitchell, a senior fellow at The Cato Institute, said the bailouts were like "giving an alcoholic the key to a liquor cabinet." Mitchell went on to list three important reasons why bailouts are bad news:

•    A bailout will hurt the overall economy by misallocating resources. When politicians grant special favors to a certain industry or a particular union, such decisions necessarily mean that market forces are being replaced by special-interest deal-making. This type of interference with free markets is why nations such as France, Germany and Japan tend to grow more slowly and enjoy less prosperity.
But if America goes down this same path of government intervention, it is inevitable that we will suffer the same fate of stagnation and higher unemployment.

•    A bailout will encourage other industries to seek taxpayer handouts. The Wall Street bailout was a disaster in many ways, most notably as measured by the weak stock market and economic volatility. But another negative aspect of the bailout is that other industries have now decided that it is OK to stick their snouts in the public trough, as well.

First Wall Street's high fliers get a bailout. Now the inefficient management and union at the Big Three want a handout. Who will be next in line to pillage taxpayers? Giving handouts in exchange for political support is akin to getting high. Once politicians decide they like the buzz of campaign contributions, they'll turn into junkies with ordinary Americans footing the bill.

•    A bailout is a perverse transfer from poor taxpayers to rich taxpayers. America's Founding Fathers surely never envisaged that the federal government would take money from one group of Americans and give it to another group. Yet much of the federal budget is devoted to redistribution programs.

So, if the government can't bail-out these companies, what should happen to them?

Chapter 11 bankruptcy.

Bankruptcy is by no means a no-hassle "way-out" for companies that have made bad decisions in the past, but it is by far preferable to taxpayers footing the bill for these companies struggling to stay afloat.

Bankruptcy will allow these companies to restructure to a more cost effective format, and it will allow them to "trim the fat" from their overhead so that they may once again become productive (and profitable) without risking trillions of dollars in taxpayer money. With court-oversight, these automotive factories may also redo expensive and entangling contracts with the Unions—a major reason why these automotive companies have become so costly to operate.

Overall, letting these companies go into restructuring, instead of preserving the status quo with taxpayer funds, is best for the long-term economic stability of both these companies and the nation.

There is no magic bullet for the current economic situation. However, we can learn from our mistakes, and refuse to repeat them—that is, don't run to the government to solve the problems that the marketplace should be taking care of itself.

At the beginning of the financial crisis, before government decided it would bailout these firms (by the way, check out how your money is being spent), other companies were looking to buy up their devalued competitors. Then, government rushed in to do a patch-job, and ended what could have been a very healthy market work-out without the government's help. Instead, government made the problem worse, with your money on the line.

Unfortunately, both Republicans and Democrats were behind it, leaving the taxpayers with no representation while their money was at stake.

Only the Libertarian Party is the true friend of the taxpayer, and we want you to know we are working night and day to maximize your economic freedom by limiting the power of the government to get involved in the economy. You've heard of the separation of Church and State, well, we'd like a separation of economy and State. Keeping government out of the economy, save for a few necessary functions like protecting property rights, adjudicating disputes, and providing a legal framework in which voluntary trade is protected, is the best recipe for the long-term stability of the U.S. economy.

Fiscal Responsibility

When the Democrats previously controlled Congress, they spent a lot of our hard-earned money on entitlement programs and pork barrel spending. When the Republicans gained control of Congress, they spent even more of our hard-earned dollars in the same reckless manner. Then Democrats regained control of the House in 2006, and have only added to the increasing government debt without slowing the spending of their Republican colleagues.

No where is this more true than with the current bailouts, where trillions of dollars will be borrowed with the expecation that future generations will pay for it.

Of course, Congress can’t take the entire blame for bad spending bills. The President is required to sign bills into law, and the current President never found it important enough to veto even one bloated Republican spending bill.

While we are amassing a tremendous federal deficit, many Americans are forced to make tough decisions about retirement, health insurance and even the education of our children. It is imperative that we immediately cease the wasteful federal spending so we can pare down the national debt and significantly increase the amount of our own money we get to keep. The federal debts aren’t going away and there are but two choices we can make. We can either tighten our belts a bit today or force our children and grandchildren to starve tomorrow. It’s time that we start expecting our representatives in Washington to act with the national checkbook as we do with our family checkbooks.

Recent LP statements on the economy:

The Wars

"We support the maintenance of a sufficient military to defend the United States against aggression. The United States should both abandon its attempts to act as policeman for the world and avoid entangling alliances." - Libertarian Party Platform, Section 3.1 (adopted: May 2008)

The Wars in Iraq and Afghanistan

For the first time in many years since the war in Iraq began, there are signs that the violence is finally ebbing. This is great news for our troops stuck in the middle of the conflict for more than five years. Finally, it seems, they are catching a break.

Though the violence may be in decline, this is no excuse to keep troops in the region for longer than it takes to begin a withdraw without undue delay—something the Libertarian Party has called for repeatedly. President George Bush has presented no plans for an end-game for the war up until recently, which now appears to be sometime in 2011—another three years. This, despite his 2000 campaign promises not to use the United States as a world police. And this, despite a dearth of evidence that suggests we are any safer now than we were in February of 2003—a month before the war in Iraq began.

More than 4,000 troops have died after Baghdad fell. More than 30,000 troops injured in combat. Trillions of dollars poured into the war to be paid later by future generations of taxpayers. These are the consequences of a foreign policy based on the "shoot first, ask questions later" mentality that has driven the Bush administration since 9/11.

This misuse of the military, reminiscent of the archaic Monroe Doctrine, is at the center of the Libertarian Party's objection to the war in Iraq and our insistent call for all troops in Iraq to come home.

While the Bush administration initially justified our invasion of Iraq as necessary for the defense of the United States, the reasons soon changed into a humanitarian occupation of the country for the good of getting rid of a despot. Nobody talks about "weapons of mass destruction" any more, at least to justify the Iraq war.

We established years ago that the war in Iraq had little to do with national security, if it ever did. Even those that initially supported the war in Iraq have come around to recognize that the longer we keep our troops in the region, the more lives we lose and the more money is wasted.

It is time to bring the troops home.

Republicans talk about "winning the war," but offer no benchmarks on which to accomplish that mission. How does one win a war with no end? Is victory when there is a stable government in Iraq? How long do we wait? Where do we draw the line?

These are all questions that the proponents of the Iraq war have left unanswered while simultaneously calling for increased engagement and long-term occupation.

Meanwhile, Democrats have fallen flat with promises to end the war. Barack Obama, who never made any solid promises to end the war in Iraq, won the election for his party. He, like his Republican colleagues, are content with being in Iraq for at least the next three years with a possibility for a long-term occupation of the country—much like we already have in more than a hundred countries around the globe.

Neither Democrats nor Republicans have offered any hope for concluding the war in the Iraq, and this is the same with the war in Afghanistan.

Many Libertarians initially supported the war in Afghanistan. The Sept. 11 terror attacks on New York and the Pentagon were looked at as an initiation of force by terrorists harbored, supported and protected by the Afghanistan government. However, the war in Afghanistan has now lasted more than seven years, and much like the Iraq war, has no clear end.

The Libertarian Party believes the future stability and security of Afghanistan exists outside the jurisdiction of the government of the United States, and calls on the government of the United States to withdraw the armed forces of the United States from Afghanistan, without undue delay.

Obama, much like his impotent Democratic colleagues in Congress, have expressed no interest in scaling back or altogether removing troops from the country. In fact, Obama has shown some inclinations that he would increase troop levels in the country; simply moving troops from one war to another.

This is not how our military should be treated.

It is time to bring the troops home.

Recent LP statements on foreign policy:

Civil Liberties

"The defense of the country requires that we have adequate intelligence to detect and to counter threats to domestic security. This requirement must not take priority over maintaining the civil liberties of our citizens. The Bill of Rights provides no exceptions for a time of war. Intelligence agencies that legitimately seek to preserve the security of the nation must be subject to oversight and transparency." - Libertarian Party Platform, Section 3.1 (adopted: May 2008)

Your Rights During the "War on Terror"

The first ten amendments to the United States Constitution, commonly known as the Bill of Rights, significantly limit the power of the federal government to usurp the rights of private citizens. The Bill of Rights provides the well-known freedoms of speech, of the press, assembly and religious worship. It also provides protections against unreasonable search and seizure, cruel and unusual punishment, compelled self-incrimination and double jeopardy. It guarantees the right to an impartial jury and denies the government the ability to compel self-incrimination.

Over the past few years, we have seen repeated government attempts to circumvent or even blatantly disregard the most basic of our guaranteed personal liberties. Rarely a day passes where there isn’t some major media mention of Guantanamo Bay, the Patriot Act, the Real ID Act, secret prisons, the use of torture or domestic spying.

The government may snoop into the most personal of your mail or your e-mail and you won’t even know they were there. People are arrested and held without trial or legal representation. Sometimes they are even tortured. They can now use your cellular phone as a bugging device, even if you aren’t currently talking on it at the time.

It is essential that we repeal the Patriot Act, the Military Commissions Act and that we restrain the Executive Branch to the limitations set forth in our Constitution.