Peter Schiff: “Government is a burden on the economy”
Peter Schiff is that market wizard people were laughing at just a year ago because of his extreme views. Well, things have turned out much as he has indicated they would. So, now he has a captive audience. And what is he saying? Government is a burden that we need less of. The way forward is not government stimulus but less government, less consumption and higher savings.
Well Peter, I have news for you: that game plan of yours is a recipe for deflation, depression, civil unrest and financial Armageddon. You see, Schiff is an ideologue from the small government, free markets crowd. While I agree with his broader themes about less consumption and more savings, I do not see eye-to-eye with his ideology. What America needs now is a practical solution to a real problem, not ideology from the small government crowd.
Schiff suggests stimulus is seen as a way to increase consumption in order to keep the gravy train going. I would suggest it is a way to ease America into a downturn and prevent the death spiral that would be likely if we took his approach. Private citizens can spend less and save more but having the government do the same will certainly lead to a collapse of our banking system. Witness Bank of America and Citigroup as case examples. And if you want to see what less government spending will do for an economy, take a look at what is happening in California where spending cuts are likely. I predict this will lead to economic hardship, mortgage defaults, lower home prices and on it goes.
No one is saying that government spending is going to save us — at least I am not. However, it can temporarily replace some of the collapsing private consumption until we have beaten back the worst of this downturn. (For what its worth, I am a small government, lower, flatter taxes proponent – when depression is not at our door.)
I see Schiff’s views as ideological and not practical. The ‘free market’ is not going to save us. Here’s the video. Judge for yourself.