Commander is completely correct on every account.
Everybody is missing the bigger picture though. In 5-10 (if not sooner) we are going to have a serious debate in this country on what the size and role of the federal government should be. Should it be large, intrusive, and unsustainable? Or should it be small with sound money like our founding fathers intended? Of course it should be the latter. All of our problems, and I mean every single one, comes from two things: 1. Too much government/federal reserve, and 2. Not following the constitution. Case in point: Article I, Section 8: (Powers of Congress) To coin money, and regulate the value therof. Article I, Section 10: No state shall make...any Thing but gold and silver Coin a Tender in Payments of debts. ***Okay so right away we see that the Fed is unconstitutional as only the government has the authority to coin money and only gold and silver should be legal tender, yet we have the federal reserve who prints money and our money is not backed by gold.
The bigger issue about teachers is the unconstitutional department of education. Anytime government gets involved in something costs go up and the quality goes down.
To Commander's point, Ron Paul (my hero), has been talking about this for years along with other Austrian Economists like Peter Schiff. And we need to stop saying this like "The Wall Street and Mortgage Industry got greedy" They did to an extent, but it was all a result of too much government intervention and the unconstitutional federal reserve. The FED prints money, and printing money alone is the definition of inflation. By simply increasing the money supply what we have is now worth less, then rising prices will follow in the future. But, because the FED printed money for lenders, Fannie and Freddie were able to have cheap money and keep lending it to people that they know could not pay it back...And of course they didn't care if people could pay it back because 1. The loans are government backed, and 2. They would just flip the property to someone else and the money from them. They don't care where the money comes from.
Peter Schiff wrote a book called Crash Proof which was released in 2006/2007. Here is a video of Schiff with a compilation of his television appearances from around 2005-2007 explaining everything that is going to happen. Now at this time things are booming, but he knows that it is artificial and he lays out the coming crisis, but everyone laughs at him. Peter Schiff was exactly right (hence the name of the video). His book also lays it out. Other light reading should include Ron Paul's "End The Fed" http://www.youtube.com/watch?v=2I0QN-FYkpw
Bush/Greenspan = Obama/Bernanke...They are the same. Both of these President's and Fed chairs base their thoughts on the destructive Kenyesian economics. As Commander points out the government gets money in two ways: 1. Borrowing, 2. Taxation...but there is a 3rd way and that is simply by Ben Bernanke using his printing press or adding zeroes into the computer to increase the money supply. So, all the growth from 2002-2008 was not real wealth or GDP growth it simply came from counterfit money printed by Ben Bernanke.
Paper money is completely meaningless and will always fail. Money needs to be backed by something with intrinsic value...like gold. If money can be printed anytime then it doesn't mean anything.
And the gap between the wealthy and the poor is increasing. Why? The fed and the government. Liberals want to give the poor and middle class money, but instead of helping them it just wipes them out because they spend the money, and the economy is not driven by spending...it's driven by savings, production, and investment. Getting into a recession comes from over-spending. So, by lower income individuals spending now they are wiping themselves out. When a wealthy individual puts money in the bank that bank can then lend the money to create businesses...which are not related to government.
Now, we also spend 2 billion dollars a week on unconstitutional wars in which need to end immediately, and of course we fund those through the FED spending money. California just had to spend 10 million dollars to fire 5 teachers. If a teacher is horrible they can still keep their job, get steady raises, and retire at 55 with full benefits. This is an absolute joke...I'm sure a salesman would like to know that if his sales declined he could still get this. The reason for this is because of government being involved in education...it's beyond ridiculous.
Other departments to abolish: The department of homeland security, health and human services, Energy, and Agriculture...to name a few.
We can't sustain these things. The government needs to cut all this spending. Because if they raise taxes they have to then print the difference in paper dollars owed through the federal reserve. Not too mention this will effect interest rates.
When we decide to get the government involved in one thing, then it's impossible to get them out and government slowly but surely gets involved in everything else, which eventually ends up being unsustainable and with the dollar failing.
People say, "What you don't like education, you don't like health care, so you don't want the government to help to make it better?" ACTUALLY, I love these things and I do want them better, which is exactly why I want the government out...they can't do it, and it gets worse and more expensive with their involvement.
We can't take care of people cradle to grave with this welfare state.
We have to protect liberty. Liberals want people to have liberty on social issues...fine, but why don't they want them to have economic liberty? Why not have liberty with your own money? They want to take care of people and make people more dependent on the government.
And I would like to apologize to all the other countries of the world because our dollar is the reserve currency for the entire world. Essentially, they backed their money with our money...not good. So, hyperinflation is coming due to the destruction of our dollar. 4 or $5 dollars for a gallon of gas...try 100 or 200. Or maybe $50 dollars for a cup of coffee. Get ready.
But if we embraced a recession in 2002 instead of passing stimulus or in 2008 then we would have been forced to save and get through it, but each time we use a stimulus it just delays a recession and makes it worse. This happens because no administration wants this on their watch because they wouldn't get re-elected, but we need to embrace what will come so we can move out of it more quickly. The teachers in Wisconsin are just one small part of the awfulness that is government involvement in our lives.
Whoever is reading, watch the Peter Schiff video above...please. We haven't had capitalism in many many years in this coutnry, and he will explain how the government has ruined it over the past half century, and capitalism and capitalism alone will avoid these problems. We have completely distorted the free market. We need to roll back government, repeal regulation, and restore capitalism. And of course we need to change our foreign policy to being non-interventionist.
Sadly, there's only one man in congress who understands all of this:
"The purpose of any political activity, from my view point, is to promote liberty." --Ron Paul