FORT LEE, N.J., Aug. 7 /PRNewswire/ -- The National Inflation Association today released the following statement to its http://inflation.us members:
"The United States government's "cash for clunkers" program, which was just expanded by $2 billion on Thursday, exemplifies the stupidity of politicians in Washington today. It's insane to think that destroying perfectly good and valuable assets, cars that people can drive, will help save our economy. This program is digging our economy into a deeper hole that we will never be able to dig out of.
We do not have an automobile crisis in the U.S., the average American household already has 2.3 cars. The automobile industry needed to collapse in order to build a new viable auto industry from the ground-floor. By artificially boosting car sales, the government is preventing the free market from cleaning out the excesses in the industry.
During the Great Depression, millions of Americans couldn't afford to buy food. With food prices falling and huge surpluses of food building, the government decided to pass the Agricultural Adjustment Act of 1933 which forced farmers to destroy crops and livestock in an attempt to artificially drive up food prices. The plan backfired and led to millions of Americans starving, prolonging the Great Depression for another six years.
The current financial crisis in America was caused by both the U.S. government and American people getting into too much debt. Not only is the government getting deeper into debt by purchasing used cars for $4,500 and destroying them, but Americans are being forced to get deeper into debt to buy new cars. The used cars being purchased and destroyed were owned by Americans outright. The free market would've encouraged Americans to drive these cars until they stopped working, while rebuilding their savings. The government is preventing this from happening and doing greater damage to the economy.
Four out of the top five models of new cars being purchased as part of "cash for clunkers" are foreign cars. Therefore, very little of this newly printed money is going to the bailed out U.S. automobile manufacturers. We are increasing our trade deficit with Japan and other foreign countries at a time when we should be manufacturing cars that we export to the rest of the world, so that we can shrink our trade deficit.
With all of the new government employees being hired to administrate "cash for clunkers", the true cost is over $6,000 per car. Most modern day economists featured by the mainstream media say "cash for clunkers" will be a huge boost to the economy, because it will help lower unemployment and increase our GDP. It's amazing how they can phrase the program as a success, when it is only leading our country further down the path of hyperinflation. The misguided and irresponsible phrase in the mainstream media will encourage politicians to come up with more stupid programs for other so-called crises.
Real Estate prices in America still haven't fallen to below year 2000 levels because the banks that are foreclosing on properties are sitting on these properties and not selling them. After banks get the required infrastructure and manpower in place and begin selling them, Real Estate prices will fall to unimaginably low levels. Will the government repeat their mistakes with the Agricultural Adjustment Act of 1933 and "cash for clunkers" and begin purchasing these houses from banks only to bulldoze them?
There have already been isolated cases in places such as Victorville, California, where banks have destroyed nearly complete new homes instead of completing and selling them. In Flint, Michigan, local government officials are promoting "the concept of shrinking Flint in order to make it stronger", by bulldozing 40% of the community. What is to stop the federal government from destroying already built existing homes, to prevent them from becoming listed on the market? It sounds like insanity, and it is, but if the government destroyed food and is now destroying cars, houses are likely next."
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About us:
The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul, Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.
Press Release
Source: National Inflation Association
On Friday August 7, 2009, 2:24 pm EDT
