Peter Schiff - The Decline of the West


PeterSchiffBlog on Mar 11, 2011

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Peter Schiff interviews Dambisa Moyo on his radio show. She is the author of several books, including How the West was Lost - -

Moya notes that most public policies are driven by good intentions. The latest example was the desire to put everyone into their own home. However, this always leads to a malinvestment of resources. Rather than resources being used to build factories, they were used to build houses. They did this for political reasons, and the evidence is clear that this is undermining our economy.

The government wants more resources to go toward things like healthcare, education, and housing. However, this isn't where the market needs more resources. In the 19th century it was true that the United States was borrowing money. The only difference is that the money back then was used for production. Today, all the borrowed money is used for consumption.

Most of this is simply common sense. The policy makers are just trying to trick everyone, and they aren't doing what they should be doing if they really wanted to serve our interests.

Foreign aid is simply taking money from poor people in rich countries and giving it to the rich people of poor countries. It also undermines their ability to be self sufficient and it makes the recipients of this money dependent on the donors.

It is clear that the political system is flawed. The election cycle implicitly forces the politicians to focus on the short-term. It would be far better to either have one term for everyone or to have far longer terms. When the country was founded, not everyone was allowed to vote. The idea was to limit the election system from turning into an auction on stolen goods. There were stricter age requirements, and there were property requirements.

When China begins to turn away from the United States, they will begin to feel it. They are already doing that. Eventually interest rates will begin to rise because of this.

It is pretty clear that there is a tension between the current generation of the United States and the future generations.


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