Where Does the Conservative Anti-Government Mantra Come From?

Sure there are plenty. This is from a About.com because I am too lazy to write the descriptions myself. http://history1800s.about.com/od/thegildedage/a/financialpanics.htm
[rquoter]
Panic of 1819
•The first major American depression, the Panic of 1819 was rooted to some extent in economic problems reaching back to the war of 1812.
•It was triggered by a collapse in cotton prices. A contraction in credit coincided with the problems in the cotton market, and the young American economy was severely affected.
•Banks were forced to call in loans, and foreclosures of farms and bank failures resulted.
•The Panic of 1819 lasted until 1821.
•The effects were felt most in the west and south. Bitterness about the economic hardships resonated for years and led to the resentment that helped Andrew Jackson solidify his political base throughout the 1820s.
•Besides exacerbating sectional animosity, the Panic of 1819 also made many Americans realize the importance of politics and government policy in their lives.
Panic of 1837
•The Panic of 1837 was triggered by a combination of factors including the failure of a wheat crop, a collapse in cotton prices, economic problems in Britain, rapid speculation in land, and problems resulting from the variety of currency in circulation.
•It was the second-longest American depression, with effects lasting roughly six years, until 1843.
•The panic had a devastating impact. A number of brokerage firms in New York failed, and at least one New York City bank president committed suicide. As the effect rippled across the nation, a number of state-chartered banks also failed. The nascent labor union movement was effectively stopped, as the price of labor plummeted.
•The depression caused the collapse of real estate prices. The price of food also collapsed, which was ruinous to farmers and planters who couldn’t get a decent price for their crops. People who lived through the depression following 1837 told stories that would be echoed a century later during The Great Depression.
•The aftermath of the panic of 1837 led to Martin Van Buren’s failure to secure a second term in the election of 1840. Many blamed the economic hardships on the policies of Andrew Jackson, and Van Buren, who had been Jackson’s vice president, paid the political price.
Panic of 1857
•The Panic of 1857 was triggered by the failure of the Ohio Life Insurance and Trust Company, which actually did much of its business as a bank headquartered in New York City. Reckless speculation in railroads led the company into trouble, and the company’s collapse led to a literal panic in the financial district, as crowds of frantic investors clogged the streets around Wall Street.
•Stock prices plummeted, and more than 900 mercantile firms in New York had to cease operation. By the end of the year the American economy was a shambles.
•One victim of the Panic of 1857 was a future Civil War hero and US president, Ulysses S. Grant, who was bankrupted and had to pawn his gold watch to buy Christmas presents.
•Recovery from the depression began in early 1859.
Panic of 1873
•The investment firm of Jay Cooke and Company went bankrupt in September 1873 as a result of rampant speculation in railroads. The stock market dropped sharply and caused numerous businesses to fail.
•The depression caused approximately three million Americans to lose their jobs.
•The collapse in food prices impacted America's farm economy, causing great poverty in rural America.
•The depression lasted for five years, until 1878.
•The Panic of 1873 led to a populist movement that saw the creation of the Greenback Party.
Panic of 1893
•The depression set off by the Panic of 1893 was the greatest depression America had known, and was only surpassed by the Great Depression of the 1930s.
•In early May 1893 the New York stock market dropped sharply, and in late June panic selling caused the stock market to crash.
•A severe credit crisis resulted, and more than 16,000 businesses had failed by the end of 1893. Included in the failed businesses were 156 railroads and nearly 500 banks.
•Unemployment spread until one in six American men lost their jobs.
•The depression inspired "Coxey's Army," a march on Washington of unemployed men. The protesters demanded that the government provide public works jobs. Their leader, Jacob Coxey, was imprisoned for 20 days.
•The depression caused by the Panic of 1893 lasted for about four years, ending in 1897.[/rquoter]

I differentiate credit from debt in terms that one is referring to liquidity of capital while the other we general consider a negative obligation. We can have a very vibrant economy with people taking on debt as long as that debt is paid back. In that sense we are talking about credit to move money around.

 

the difference between good debt and bad debt.

good debt. You use the purchase goods or services and plan to pay back the debt.

bad debt. You use the purchase goods or services and have no plan to pay back the debt, except to use more debt. Soon enough, the interest on the total debt will be greater than the income earned / generated.

 

Just because it belongs here...

 

and doctors, who don't even have their fixed expenses (MINUS salaries) covered when they treat Medicare patients

oh, and the taxpayers when the program ends up costing trillions of dollars

 

the boom and bust cycle has been going on in the world since money was invented thousands of years ago.

There have always been speculators and there will always be. They even serve a useful role in mitigating the risk of those who build homes or produce oil or whatever.

The problem is that what is being moved through the market has become so complex that no one quite understand what they are buying. Most people don't understand the implications of the mortgage they are getting. If you come from modest means and have the chance to own your own home, you went for it and signed into a mortgage being told your credit was sound and the bank though you were a good candidate. Did you understand all the terms? Reading it wouldn't help - these folks didn't intent to default...they simply had no idea what they were doing.

The gov't failed by not placing enough regulation. They didn't protect people by making sure they weren't taken advantage of. They didn't protect consumers, and they failed to protect investors because they didn't regulated the repackaging of these loans.

We all know what happened now.

Preditory lender / bank gives a loan to a less than credit-worthy candidate by hiding higher interest rates in the later years and packaging it as an ARM. They then sell these loans to a servicer, who packages and resells issues bonds against them through a i-bank. The bonds are kinda low value that no ones wants because they are high risk. So instead, they repackage this stuff again by over collateralizing the bonds which the rating agencies then give AAA ratings for. Investors - such as AIG and such, not knowing that they are actually buying garbage - or not caring - buy them because they seem like a good deal - AAA bonds with a high interest rate and a lower price. A good investment right? Wrong.

You know the rest. Who was the criminal in this situation? Probably the lending institutions...while everyone else turned a blind eye. But where was the govt to regulate this mess? Who let lenders make these kinds of loans? Who let insurance companies purchase derivatives? Who let rating agencies upgrade lowly bonds to a top rating?

This is what happens when you tell the gov't to get out. When you say we need less gov't...this is the sort of result you have.

Because the answer that we need "less gov't" or that we need "more gov't" is completely ludicrous. It's not about that. It's about having the "right amount" of gov't for each particular situation. To strike that balance between free market capitalism and growth, and just down right idiocy that threatens the whole system.

You can't go either direction too far. Too much regulation and you kill growth. Too little and you set-up a massive time bomb.

 

I don't think you can lump "conservatives" into one big group. And they're not all stupid or bad like you are insinuating.

For example, fiscal conservatives and social conservatives can differ in a big way. Heck - social conservatives used to be called Democrats.

People are more complicated than that. It wouldn't be fair for me to lump all liberals into one group too, take some of the more polar viewpoints, and claim that they are stupid or hypocrites.

 

Thanks for pointing that out.

I completely disagree. All debt is intended to be paid back. If the lender or lendee does not intend on settling the debt, then its would be ... charity? Credit should not be extended if the creditor can not sustain the loss or recuperate the loss through an asset.

On the individuals end, any debt that does not produce an income to exceed that debt is bad debt.