How to fix the Economy?

People say that the economy is in bad shape because things are deflating ... house prices went down, so people defaulted on their home loans, this caused mortgage securities to go down in value causing investment companies and banks to go under, so loans have become difficult causing companies to go bankrupt and stock prices to deflate.

Deflation is not necessarily a bad thing ... it is an opportunity for those who can act on it. People generally think that their investment is doing well if its monetary value is higher. That is a wrong assumption. If everything deflates, average person should see an increase in value of the money he / she has. The 10,000$ in the bank should be worth more than before. We are seeing the effects immediately in oil prices and other commodities. After all, don't you wait for discounts to appear at stores before buying stuff? Why don't you apply the same logic for stocks or home prices.

Govt should get out of the way and stop bailing out companies. If they are in trouble, they should be allowed to gracefully go bankrupt. It is good for the remaining companies since it frees up resources for them to use and they can survive. They shouldn't bail out home-owners as well. The common argument is that people will be homeless. Has anyone checked how many homes purchased in 2003-2006 are really occupied by their owners?

Many people do have money and are waiting on that buying opportunity. They are just waiting for stock prices to bottom out or home prices to stop falling. The only way to get those people to invest would be make the prices go down even further and quickly.

If there is no govt help, prices will fall further and it will create an environment where people with money can feel that they have a great discount. This will push money back into the economy and prices will go up again.

The only risk is: people may think that investing in developing countries is better than in US and that would create a very bad situation. That will bring stagflation as everything deflates in US but since developing countries progress, there is demand for commodities and they actually increase in price. This means: a recession in the US with inflation. Add to it the risk that US govt has too much debt and that people would lose faith in the dollar causing worse inflation. I see why the US govt wouldn't want the economy to get a deflationary experience and are working so hard against it. In the long term it is always bad ... a recession avoided today by monetary policy will bring a depression tomorrow.

Ills of Politics

The only way to get rid of problems in politics is to ensure that those in power have minimum control over the lives of the people. If they have no control, they have no power. If they have no power, why can there be corruption?

Corruption exists only because someone has power to do something but he has NO motivation to do the right thing. If you are in the government, that is generally the case. You have to fix the electricity problem in some state (control) but you don't really care that people get electricity (no motivation) but you need money (good motivation), so why not take some money under the table to sell the contract out.

The best way of solving the electricity problem would be to allow private companies to offer electricity at the best price. Consumers have choice and companies have to compete to bring the price down, so finally the "common man" gets the best deal.

In India, where socialism is the proposed goal of the government, there is lot control from the goverment. People in power have taken on the task of ensuring that poor people have money which they do by distributing tax payer money in free rice distribution schemes or giving houses to any person who needs it. How can you be sure whether it is fair? India has free market capitalism now after reforms in 1990s but it is still stuck with socialist agendas.

USA was different but it is getting there. Instead of giving handouts to poor people, it is giving handouts to large failing companies. There is more chance for corruption here: who decides who gets bailout money or not and what is the motivation?

The real solution to the problems in our government is NOT a campaign against politics but a campaign against control. People need to step up in each and every place and get their decision power back. Railways should be the first goal. We have outdated railway system. Ask for government not to run it. Next is petrol / diesel prices, why should the government decide that?? Ideally, the police and the military are the only departments that need to be run by the government. If you need a trouble free politics, vote for Libertarianism