A Novel Idea

I hear a lot of discussion both in Canada and also in the USA regarding how the government can improve our respective economies.  It usually resorts to the typical banter of increasing and/or changing regulations, increasing subsidies and tweaking the interest rate to help take care of us in the marketplace.  We already have a marketplace that has regulations; if they didn’t work well enough the first time, why should we believe that more tweaking is necessary? 

I have a novel idea; How about we, i.e. the marketplace, tell the government how the economy is doing?  If the economy is doing well, we will spend more.  If it’s doing poorly, we will spend less and save.  Isn’t that what the market is all about?  Finding out at which point people will buy goods and services and at which price level they will pass on the same goods?

We somehow have come to believe, through passive consent, that a few people in Ottawa know more about the economy than the rest of us, and that we need to be shielded from the realities.  I believe the time is coming when more of us will come to realize that it is perhaps the government, through constant monitoring of the marketplace that causes some of the problems. 

When the economy starts to halt a little bit, leave it alone!  Changing the interest rate only provides us with an artificially boosted economy.  It’s a “false positive”, geared to have us spend and borrow more when the market has already told us to slow down and spend less.  I am convinced, as are many others, that Government involvement through subsidies, regulations and interest rate tampering only prolongs and worsens recessions and other economic downturns.

It’s time for us, the true marketplace regulators, to say that we can take care of ourselves.  Let the “free market” be truly free.  We will spend when it’s good to spend, save when we should save and borrow when there is true opportunity for investment.