Ukraine Demonstrates the Importance of a Free Economy

Much is made of Russia’s threat to invade Ukraine, and justifiably so.

However, almost nothing is made of the fact that Ukraine is floundering economically.

Associated Press reports:

Ukraine also is struggling on the financial front. The treasury is almost empty and its currency is under pressure after years of running large deficits. The International Monetary Fund [IMF] said a fact-finding mission would visit Ukraine starting Tuesday for 10 days. Ukraine has asked the IMF for rescue loans and says it needs $35 billion to pay its bills over the next two years.

Countries capable of defending themselves are countries capable of supporting themselves.

Clearly, the Ukraine needed less spending and taxing, and loads more free enterprise than it had. Wikipedia and other sources describe Ukraine as a “market economy,” but a market economy is actually one in which the means of production is privately owned and managed. By that definition, there are no market economies left in the world, not even in the United States.

What about the IMF? Could the IMF have saved Ukraine? It’s not borrowed money in fiat currency from declining capitalist nations such as the United States or pseudo-capitalist nations such as China that can save Ukraine. Only Ukraine can save itself. And that’s through real capitalism.

Capitalism fosters private property and provides incentive to produce through profit. While most people morally condemn profit as a motive, it’s this very incentive that leads innovators and entrepreneurs to take risks and work hard, as well as hire employees, to create goods and services wanted in an economy.

Capitalism is beneficial whether the economy is new and untested, as in Ukraine or any other third-world country, or established and sputtering, as in Western Europe, Japan and the United States.

If Ukraine had fostered a free society economically, it probably would not have been so vulnerable to attacks from its neighbor, Russia. And if the United States were a freer economy than it is, we’d be in a better position — morally, economically and militarily — to stand up to the Russian dictator Putin.

Like the Ukraine, the United States will — ultimately — be unable to defend itself without a resurgence of economic freedom. As we bury ourselves deeper into debt and place more unfunded mandates on private individuals and companies — Obamacare simply the latest  — it stands to reason that our military capability will weaken over time, as well.

The Obama Administration is already downsizing the military. They’re doing this for ideological reasons, but undoubtedly they’re doing it for fiscal reasons, as well. The U.S. government is completely broke, and now spends/borrows way, way more than the private sector could ever finance. With Americans demanding more and more social insurance benefits, farm subsidies and corporate subsidies at the ballot box, the government feels compelled to keep those coming even if it means downsizing the military to levels not seen since before World War II.

The New York Times online 2/23/14 reports: Defense Secretary Chuck Hagel plans to shrink the United States Army to its smallest force since before the World War II buildup and eliminate an entire class of Air Force attack jets in a new spending proposal that officials describe as the first Pentagon budget to aggressively push the military off the war footing adopted after the terror attacks of 2001.

Do you think that a weakening American military will have no consequences? Is America completely immune to external threats simply because most of us assume it can’t happen here? Some of us may be in for a rude awakening, especially if our economy continues not to appreciably grow, innovate or expand as it did in prior generations.

Notice how the two political parties don’t even fight over taxes any longer. Republicans wish to spend more with lower taxes, while Democrats wish to tax more as well as spend more; but both sides undoubtedly realize that if we tax private citizens any more than we already do, the gross national output will be even less — and the debt to finance unending increases in social spending will escalate even more than it has. In the end, both sides concede the only option is to keep increasing the “debt limit” because exponential increases in social spending (Social Security, Medicare, Medicaid, Obamacare) must be allowed to stand.

The media is of no help in educating or informing us. Obama apologists such as Rachel Maddow of MSNBC are blaming the Bush Administration (now out of office more than 5 years) for the Russian invasion of Ukraine. This is ludicrous in the extreme. When contemplating “news authorities” such as Maddow, it’s becoming harder to distinguish the real news from the parody of a Saturday Night Live skit. Given the state of our government, what is there to satirize? Our current elected officials are literal parodies. So are their defenders in the media, none the least of which Rachel Maddow.

Obama critics are focusing on the President’s obvious and hapless weakness as a commander-in-chief. That goes without saying.

But both sides miss the point, as usual. The real point is that in order to have a military capable of defending us, we must have a private economy capable of funding a military. Deeper than that, in order to have a military and government motivated to stand up for a country, they must be defending a nation worth fighting for.

If Americans wish not only to survive, but to thrive, then the majority who now seem indifferent (if not hostile) to economic freedom had better rethink their positions.

Otherwise, life could become a lot more uncomfortable as the Putins of the world rise to fill the vacuum where military strength fostered by economic magnificence might — and should — have been.

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