Laws of Economics

The law of supply and demand used to determine prices still works. The temporary oversupply of soybeans has taken the price from $10.00 per bushel to $8.87 per bushel. The same thing happens whenever farmers get a bumper crop and the supply exceeds the demand.  Prices of farm goods go up when a drought produces a lower supply in the face of a higher demand.  When consumers are free to not buy commodities, the demand goes down and so does the price. When beef prices go up, we buy chicken until beef prices go back down. Farming is an admired form of legal gambling.

Wiley home buyers try to get in the path of development. When we bought our first home in the exurbs in 1966, we knew we were in the path of development.  We sold it in 1975 for $20,000 more than we bought it for. Our mortgage payments were $150 per month and the total we paid in mortgage payments over these 9 years was $16,200. In 1960 the population of St. Charles County Mo was 52.970. By 1970 it had risen to 92,954 and by 1980 it had risen to 144,107. We did the same thing in Salina Kansas in 1975 and sold it for $30,000 more than we bought it for and our house payments were $28,800. We did the same thing in Atlanta Georgia in 1983. We bought it for $137,000. Our current home is paid for and is worth $600,000. Every dollar I ever paid in home mortgage payments went back into my own pocket.

We need to invest in assets that appreciate like single family homes and the stock market and debt equity when interest rates are high to stay ahead of inflation. I expect government to invest in assets that appreciate, but they never do. I don’t think government is capable of managing anything.

US government subsidies for healthcare and education have removed price control from the consumers. When consumers decide not to buy these services, the government increases the subsidy to off-set the loss of customers and the prices keep going up. These two industries are in crisis and the cost is unsustainable. Government has refused to address the cost drivers of these industries. Lawyers don’t want malpractice reform. Doctors don’t want cost reductions. Teachers don’t want education reform. Congress wants no meaningful reforms. It’s like giving your teenager a credit card. We failed to recognize that students are actually the ones who are responsible for their own education and the human body is capable of healing itself if it has the proper nutrition.

The over-subsidization of healthcare and education remain, because they have been sold as emotional issues. This makes these industries unsustainable.  Fraud, waste, abuse, excess, price gouging and political corruption are drawn to these industries.  Government is not equipped to manage these industries. 

Replacing the free market system with the managed economy has corrupted this law with socialist policies, government subsidies, regulations, industry seizures and gutless politicians who run up our credit card balances to keep getting elected.  The only Congressman who held to his Constitutional principles and served in Congress for decades was Ron Paul.  His voters were unique in their support of the US Constitution (as written).

The only government subsidies that ever paid off were the Revolutionary War, the Louisiana Purchase, the Mexican American War the invention of Penicillin and the Toyota Prius. Everything else was a sand hole.

Norb Leahy, Dunwoody GA Tea Party Leader