John F. Kennedy on the Economy

The following is a quote from President Kennedy’s State of the Union address Jan. 14, 1963. I only wish the present Democrat in the White House could understand what President Kennedy had to say!

“America has enjoyed 22 months of uninterrupted economic recovery. But recovery is not enough. If we are to prevail in the long-run, we must expand the long-run strength of our economy. We must move along the path to a higher rate of growth and full employment.

“For this would mean tens of billions of dollars more each year in production, profits, wages, and public revenues. It would mean an end to the persistent slack, which has kept our unemployment at or above five percent for 61 out of the past 62 months—and an end to the growing pressures for such restrictive measures as the 35-hour week, which alone could increase hourly labor costs by as much as 14%, start a new wage-price spiral of inflation, and undercut our efforts to compete with other nations.

“To achieve these greater gains, one step, above all, is essential—the enactment this year of a substantial reduction and revision in Federal income taxes….[A] net reduction in tax liabilities…will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. It will, in addition, encourage the initiative and risk-taking on which our free system depends—induce more investment, production, and capacity use—help provide the two million new jobs we need every year—and reinforce the American principle of additional reward for additional effort.”

Dysfunctional Fathers

Several years ago, while Nancy and I were still with the organization, Caring Hands Pregnancy Center in southwest Denver launched a program designed to help men become better fathers. We used the 24/7 Dad Program of the National Fatherhood Initiative as the template for our outreach.

As a first step in organizing that program, we recruited a group of twelve men from a large church in the Denver area to be mentors for the younger fathers who signed up to take the course. The mentors were selected based on the fact that they were successful fathers. They had intact families, a successful first marriage, and young adult children who were healthy and productive members of society. In the early phase of the course, these men were asked to present a short talk about their own fathers. They were asked how their father participated in the raising of the children, how he treated his wife, what was his disciplinary policy regarding the children, etc. They were asked about their general evaluation of their father’s fathering activity.

To my great surprise, I found that these mentor/fathers were largely dissatisfied with the fathering functions of their own fathers. Only two out of the twelve were happy with the fathering they had received from their own fathers. The elder fathers had been neglectful, authoritarian, sometimes abusive of wife and children; and almost all of them had failed to participate with their children in the growing-up stage of the children’s lives.

Organizing this course provided me with a disappointing perception of the fathering abilities of the past generation of fathers. During that course, we all learned that there are better ways to father children. Fathering is not something that comes naturally; good fathering ability is not an instinctive quality. Fathering skills must be LEARNED!

I recommend that if any readers of this blog would like to learn how to be a better father, he should consult Fatherhood.org

The Relationship of National Debt to Gross Domestic Product

It is a well-known fact of national economics that increasing amounts of national debt produce ever-decreasing levels of economic growth. click here . Please consider the following quote from a book by Hunter Lewis, “Where Keynes Went Wrong.”

“There is a diminishing return to taking on debt. In the United States, we have operated on Keynesian principles since World War II. The government has printed money. Debt levels have grown. We have not only gotten inflations and bubbles. We have also gotten less and less growth for each increment of debt.

“During the decade 1950-1959, we added $338 billion in debt, and we got 73¢ in economic growth (increase in gross domestic product) for each $1 in new debt. For the decade 1990-1999, we added $12.5 trillion in debt, but got only 31¢ of growth per dollar of debt. For the seven plus years 2000-2008 (1st quarter), we added $24.3 trillion in debt, but got only 19¢ in growth for every dollar of debt. It thus required more and more debt to generate further growth.”

As the above link points out, a study by North Carolina State University Economics Department shows that if economic policy by the government continues as it is now, by 2020, the national debt/GDP ratio will be 110%; and the annual growth rate will be -.56%!

Growing national debt produces a negative growth in GDP, just because it costs more to service the debt than the increasing input of money can produce in growth.

During the present administration and the end of the Bush era, we have seen some $870 billion used to stimulate the economy; and the annual growth of the economy is still at only about 1%/year. Now we see that President Obama wants to inject another $470 billion into the economy in his “jobs bill.” When will he ever get the clue? More deficit spending will not do the job.

The First Step in the Road to Salvation, Foreknowledge: Romans 8:29 & 30

I have often pondered the meaning and significance of these verses; but recently, I have listened to a sermon by Alistair Begg on this subject; and I want to share a point of that sermon with you—at least, this is the part I took home with me.

The passage says that there are several steps in the final salvation of a believer: First, there is foreknowledge of the one who will be saved from his sins. Next comes predestination followed by God’s effectual calling. Next comes justification, and, finally, glorification. Below, I wish to discuss foreknowledge, because this has been a stumbling block to me. I believe that God knows who will choose Him—but, on what criteria?

God’s foreknowledge is a knowledge borne out of his ability to know the future—a strange and unknown ability to us, mere humans, who cannot even conceive of such an ability. Nevertheless, God can do it. Well, what, exactly is it that God knows? He knows what he has, in advanced, ordained. But that is not all—He also knows what we are going to choose of our own free will. THE TWO GO TOGETHER. Free will and God’s sovereignty go together in this disposition.

In discussing this situation, it is necessary to understand that there are two scenarios, which do not exist. The first is a case in which a person wants to know God, who understands the principles of His teachings, who loves Him and the things that are His; but, since he is not one of the elect, he is excluded from heaven. We must remember that Jesus said, “…whoever comes to me I will never cast out.” (John 6:37) The second scenario is one in which a person is living a life of willful sin, who has no interest in Christ and no faith in God—but…because he is one of the elect , God admits him to heaven. Neither of these situations is true.

Somehow, in some mysterious way, the freewill choice of men and women and the supreme decision of God about election to his family coincide perfectly. Only those who will have the faith prescribed in the Bible will receive the eternal life that Christ promises. And…at the same time, God knows each one of us who will make that choice. It is a mystery; man’s freedom in Christ allows him to optionally go God’s way and at the same time to realize a measure of obedience to the Gospel admonitions of the Scripture. That is, to conform to God’s foreknowledge of his elected, salvational, condition.

Another important point from Mr. Begg’s sermon is that no matter what we think of or know about this so called chain or way of salvation, our own particular salvation has nothing to do with it. We are saved by believing in and having faith in the Savior—it is simply that and no more. So…I think we should not spend very much effort in understanding all the theological ins and outs of this complicated theology. Our relationship to the Savior is really all that counts in our eternal destiny.

An Open Letter To President Obama

Mr. President,

I am writing this letter to tell you respectfully that I disagree with your administration’s fiscal policies. I think we have had far too much stimulus, bailout, and “quantitative easing.” These policies have held the interest rates from the Fed at near zero for 32 months. Still…the unemployment rate is above 9%. This indicates a failure of Keynesian economics to produce the results it aims to produce. WE NEED A DIFFERENT PLAN!! The Federal Reserve is trying to get money for the government by selling 10-year Treasury bonds at 1.88% interest—who in his right mind is going to buy such a low yield bond? There is no profit in buying government securities.

Lately, Congressman Barney Frank has proposed stripping the Federal Reserve Governors of all membership in the Open Market Committee, leaving all the votes on that committee in the hands of political appointees. They only had four votes out of twelve, anyway; and if they are eliminated, I fear that all voice for tighter money on that committee will disappear.

Monetary policy should not be left up to politicians. I believe that private sector should have more, not less, say so on the Open Market Committee.

What Is the Federal Reserve Bank; and How Does It Work?

Today’s newspapers are full of references to economic news; and references to the Federal Reserve Bank are replete in those articles. But…many of us do not know what the Federal Reserve is and how it works. Here is a short primer:

The Federal Reserve is a bank that is established by Congress. It consists of the central bank of the United States. It includes a Board of Governors, 12 District Banks, 25 Branch Banks, and assorted committees. The most important of these committees is the Federal Open Market Committee, which directs monetary policy. The FOMC is made up of 12 voting members; eight of these members are political appointees of the President, and 4 are regional bank presidents.

The function of the Federal Reserve is to control monetary policy, which, in other words, is the supply of money for the country. The “Fed,” as it is called, puts money into our economy when recessions occur; and it takes money out of the economy when inflation is the problem. By doing these manipulations, the Fed is supposed to control overall prices and unemployment.

The Fed uses 3 mechanisms to control prices, inflation, and recession: The first is “open market operations,” which is the Fed’s option to buy or sell government bonds—by doing so, the Fed can either add to or subtract from the money supply in the country. The second is to manipulate the “discount rate,” which is the interest rate the Fed uses to loan money to other banks for them to lend the money to borrowers. The third method is to manipulate the “reserve requirements” of commercial banks, i.e., the amount of money the commercial banks are required to keep on hand to secure their deposits. By lowering or raising the reserve requirements the Fed can add to or subtract from the supply of money circulating in the economy.

If my readers are interested in learning more about economic principles and terms, I would suggest that they look at http://glossary.econguru.com/economic-term/reserve+requirements

What’s Changed in America Since the Revolution?

Of course, many things have changed in America—technical things come instantly to mind. But the things that come to my mind as most important, are the things having to do with the basic attitudes, values, and abilities of our people. As an example, many have commented on the difference between the beliefs, purposes, and values between the founding fathers and the present day politicians who run our United States.

Many books are in print, which would seek to tell us that the founders of America were self-seeking bigots who had no altruistic purposes in mind when they wrote the Declaration of Independence and our Constitution. The books propounding these views began to appear in 1896 in an essay called “The Political Depravity of the Founding Fathers,” by John Bach McMaster. These books and writings continued for more than a century and seriously called into question even the things we take for granted about the founders’ desire to seek the democratic will of the people in establishing a representative form of government. In particular, many writers have claimed that the founders were not Christian to any great extent. They are said to have established a government completely separate from Christian faith and practice.

On the other hand, writings are in print, which tend to paint the founding fathers as near perfect, demigods with only the good of the country at heart. The truth is somewhere between these two extremes.

Gordon Wood, a professor of history at Brown University has written a book entitled "Revolutionary Characters, What Made the Founders Different." In that book, he points out that the founding fathers of our country were strongly influenced by the culture and the intellectual forces of their day. They were sons of the enlightenment. They sought to establish a country where freedom would prevail and where civil society would rein without hostile and harmful influences to destroy the hopes and aspirations of men and women of good intention. They appealed to reason as a foundational building block. They were always aware of a higher law than the "natural law" or "common law" of their day,i.e., the implicit and explicit laws of the Bible. . They strove to epitomize good manners and good faith among their co-workers in this project of establishing a new nation. For the most part, they would act in a respectable and honorable way toward those around them; and they always tried to leave the impression of being gentlemen in their actions.

The American founders knew well that the polite and sophisticated metropolitan center of the empire was steeped in luxury and corruption. England had sprawling, poverty-ridden cities, over refined manners, gross inequalities of rank, complex divisions of labor, and widespread manufacturing of luxuries, all symptoms of over-advanced social development and social decay. It was said of this society by Samuel Stanhope of Princeton University, “that human society can advance only to a certain point before it becomes corrupted, and begins to decline.” To many, England in the 1760’s and 1770’s seemed to be on the verge of dissolution. The North American colonists who came in direct contact with London were shocked at the notorious ways in which hundreds of thousands of pounds were being spent to buy elections. This “most unbounded licentiousness and utter disregard of virtue” could only end, as it had always had in history, in the destruction of the British Empire. The American founding fathers wanted with all their heart and energy to avoid such a society.

As a result of this motivation, our founders set up a system of government which was, at the time, the beginning of egalitarian democracy. The voices of ordinary white people began to be heard as never before in history. The founders, were, themselves, an elite aristocracy imbued with high ideals and aspirations for the good of the country. What they could not have suspected, however, was that when the voices of the common people were considered, many of their high-sounding ideals would be trampled underfoot; and political preferences, partisan politics, and the influence of social and economic pressure groups would overwhelm much of what they were so valiantly trying to achieve.

We are seeing this effect, today; and the high ideals of our founders will probably never, again, be visible in our American society. It has been posited by knowledgeable observers that as soon as the voting majority see that they can vote themselves significant benefits, they will do so; and social freedom and entrepreneurship will disappear from our society. I fear that those days are upon us.

It is my personal opinion that much of the gain in societal management which was so very salutary to our country in the beginning will never, again, be seen in its pure form. I believe that one reason for this is that the effect of Christian religion will not likely be infused into our behavior and policies as it was in the lives and actions of our founders. Such statements as the one uttered by John Adams, our second President, are not likely in our present day political climate. “The general principles on which the fathers achieved independence were the general principles of Christianity. I will avow that I then believed, and now believe, that those general principles of Christianity are as eternal and immutable as the existence and attributes of God.”