I have to write an argumentative essay with 3 ideas with 3 paragraphs for my English class. It has to be under 4 pages and not too complex. I need opinions on this. Btw most other kids in the class are doing "Being fat is bad" and "Weed should be legal" so it should be an easy A but my "Professor" hates me.
Free Market Capitalism Will Save the Economy.
In this modern world of Free Market Capitalism there is a lot of misinformation about the market and what our system truly is. Many do not realize we do not have Free Market Capitalism, but an economic system called Keynesianism. New channels, papers and magazines discuss economics every day without truly telling the readers or understanding what our economy has become. The solution to today's economic problem, and problems that might arise in the future, is to allow the free market to correct itself.
In 1913 the Federal Reserve Bank was founded because of the Panic of 1907, to ensure a safe and centralized money supply and to look after the banks in America to ensure the system as a whole remained safe and effective. However it was nothing more than an attempt to corner the market and set up a central economy in the name of saving the Free Market. One of the vital roles the Fed has is to control interest rates for the nation, which in turn can lead to inflation or deflation. A central bank controlling the interest rate is tantamount to central planning, thus making the free market impossible. Interest rates are the driving force for the economy, letting people know when it is right to save and invest or consume goods. Letting interest rates “float” in the market allows the economic conditions to control them, which in turn leads to the most efficient allocation of capital. What is called Capitalism in America today is only in name, not practice, causing the latest economic depression. If the cause of economic problems are a centrally planned economy through government controlled interest rates, the solution has to be the opposite, a free market in practice not just in name.
What is good for an individual may not be healthy for the economy as a whole in a Free Market. Often when a large corporation or bank does not fare well government violates the Free Market to save or bail out that group. Bail outs create a two fold problem in the economy, allowing for misallocation of resources and encouraging long term unsustainable behavior. When government bails out a group it causes unnatural competitive advantage to that group in their market, not allowing resources to be allocated to the most efficient. A bail out rewards bad behavior and takes the assets from the competent and gives it to the incompetent. A Free Market would allow everyone who does not do well to fail and then their assets sold off to the strong who will continue to innovate and cultivate their market. In 1998 Long Term Capital Management (LTCM) lost several billion dollars in a few months, leading to its bail out. LTCM was a hedge fund who acted recklessly under the Free Market and would have paid the price if not for a bail out. This led to a mentality of risk taking never before seen in the US, causing banks and hedge funds to violate the market with full knowledge the government would back them. Actions such as this helped create the economic depression the nation was just in. Market violations to protect the weak only leads to more weakness in the economy, creating a cyclical systemic problem as more bad behavior is rewarded and encouraged in all areas of the economy.
Balanced trade is the last of the main concepts of a healthy Free Market, it is required to keep everything running smoothly. Artificially manipulated economies allow trade imbalances and deficits to occur over a long period, usually advocated for by people claiming it is part of Capitalism. Many do not realize this outcome is detrimental and unsustainable, leading to currency crises and or trade collapse in the long run. Economists will argue it is not the trade deficit but the balance of payments, our ability to make payments on foreign goods. This is flawed thinking because in the long run we must print and borrow money to sustain the balance of payment, which always leads to inflation, currency crisis and a complete collapse in trade. Only if we use surpluses to pay for imbalances in the short term does it work, but when that surplus is gone the market must be allowed to control trade instead of printing or borrowing by the government to manipulate the market.
Reading many economic text books, and listening to a large variety of news programs I have come to the conclusion we have lost touch with what Free Market Capitalism really is and how it will save our economy. America first must understand what economic system we have in place, then understand the Free Market so we can implement it back into our economy. Once this has happened we can go back to a truly healthy economy with long term growth possibilities that we can pass onto our children.
Free Market Capitalism Will Save the Economy.
In this modern world of Free Market Capitalism there is a lot of misinformation about the market and what our system truly is. Many do not realize we do not have Free Market Capitalism, but an economic system called Keynesianism. New channels, papers and magazines discuss economics every day without truly telling the readers or understanding what our economy has become. The solution to today's economic problem, and problems that might arise in the future, is to allow the free market to correct itself.
In 1913 the Federal Reserve Bank was founded because of the Panic of 1907, to ensure a safe and centralized money supply and to look after the banks in America to ensure the system as a whole remained safe and effective. However it was nothing more than an attempt to corner the market and set up a central economy in the name of saving the Free Market. One of the vital roles the Fed has is to control interest rates for the nation, which in turn can lead to inflation or deflation. A central bank controlling the interest rate is tantamount to central planning, thus making the free market impossible. Interest rates are the driving force for the economy, letting people know when it is right to save and invest or consume goods. Letting interest rates “float” in the market allows the economic conditions to control them, which in turn leads to the most efficient allocation of capital. What is called Capitalism in America today is only in name, not practice, causing the latest economic depression. If the cause of economic problems are a centrally planned economy through government controlled interest rates, the solution has to be the opposite, a free market in practice not just in name.
What is good for an individual may not be healthy for the economy as a whole in a Free Market. Often when a large corporation or bank does not fare well government violates the Free Market to save or bail out that group. Bail outs create a two fold problem in the economy, allowing for misallocation of resources and encouraging long term unsustainable behavior. When government bails out a group it causes unnatural competitive advantage to that group in their market, not allowing resources to be allocated to the most efficient. A bail out rewards bad behavior and takes the assets from the competent and gives it to the incompetent. A Free Market would allow everyone who does not do well to fail and then their assets sold off to the strong who will continue to innovate and cultivate their market. In 1998 Long Term Capital Management (LTCM) lost several billion dollars in a few months, leading to its bail out. LTCM was a hedge fund who acted recklessly under the Free Market and would have paid the price if not for a bail out. This led to a mentality of risk taking never before seen in the US, causing banks and hedge funds to violate the market with full knowledge the government would back them. Actions such as this helped create the economic depression the nation was just in. Market violations to protect the weak only leads to more weakness in the economy, creating a cyclical systemic problem as more bad behavior is rewarded and encouraged in all areas of the economy.
Balanced trade is the last of the main concepts of a healthy Free Market, it is required to keep everything running smoothly. Artificially manipulated economies allow trade imbalances and deficits to occur over a long period, usually advocated for by people claiming it is part of Capitalism. Many do not realize this outcome is detrimental and unsustainable, leading to currency crises and or trade collapse in the long run. Economists will argue it is not the trade deficit but the balance of payments, our ability to make payments on foreign goods. This is flawed thinking because in the long run we must print and borrow money to sustain the balance of payment, which always leads to inflation, currency crisis and a complete collapse in trade. Only if we use surpluses to pay for imbalances in the short term does it work, but when that surplus is gone the market must be allowed to control trade instead of printing or borrowing by the government to manipulate the market.
Reading many economic text books, and listening to a large variety of news programs I have come to the conclusion we have lost touch with what Free Market Capitalism really is and how it will save our economy. America first must understand what economic system we have in place, then understand the Free Market so we can implement it back into our economy. Once this has happened we can go back to a truly healthy economy with long term growth possibilities that we can pass onto our children.
Last edited:
