Credit Squeeze

We keep hearing about how the credit market is drying up. One way to reduce the credit squeeze and increase lending is to suspend the state usury laws for 2 years.
http://en.wikipedia.org/wiki/Usury

Another way would be for interest income earned on loans by private individuals to be tax free for the next 2 years.

These two practices would be more of a free market where risk is assessed daily by millions of participants. Of course, no one really wants a free market with all the perceived chaos and individual responsibility.

The pundits seem to think if some consumers cannot get credit to buy a car the economy will crash. Their advocacy for easy credit is what led to this credit crisis in the first place. Many consumers should NOT be buying on credit because they pay more in the long run for a product if they bought with cash. Many consumers should NOT buy on credit because they do not have a positive cash flow in their daily economics.

The pundits also say many small businesses cannot get loans from their banks. Many small businesses should NOT get credit. Many small businesses are operated inefficiently and should go out of business. The advocates want these poorly run businesses to have easy credit. Easy credit is what caused the current credit squeeze. When these poorly run businesses fold the existing businesses will provide the necessary services.

The aristocracy loves to get in front of a microphone and exalt free markets, and lauding the American way as the best way, pretending in their encomiums that the American society is a free market society, while they caterwaul for even more government involvement in the market.

The whole banking system has been a government controlled market since the Federal Reserve Bank was created in 1913. There was no need for the Federal Reserve Bank. In a free market people will find a way to trade and store their money. The bankers wanted the government to help eliminate risk in their industry. Other economists had economic dreams, like an architect has dreams of building something grand. This centrally planned banking system, less than 100 years old, is about to collapse, like all centrally planned and regulated systems collapse.

The bailouts of 2008 are not for Wall Street or main street. They are for the government. It needs a healthy host to suck blood from. I think we should do a complete disk "Recovery" of the economy, like we do a computer recovery. After all the junk and cookies are removed from the economy, it will be like new, running smoothly.

Charles Tolleson