Thursday, October 16, 2008

Don't Blame Capitalism

A must read column from Peter Schiff who lays blame for the current financial crisis where it belongs,on irrational government promoted home-buying and government policies that created unnatural demand for home purchases and a (tax-free) incentive to speculate in real estate. Further, monetary policy caused houses to become more expensive, it also temporarily provided buyers with the means to overpay.

And he warns of the likely repercussions:

The United States reached its economic preeminence on the strength of its free markets. So far, the economic disaster exacerbated by government policies is creating opportunities for further government interference, which will lead to bigger catastrophes. Binding the country to a tangle of socialist ideals will seal our fate as a second-rate economic power.

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