Economics 101
Posted February 14, 2009
There are only three ways the United States Government can get money. It can
borrow it, tax for it, or print it. In reverse order:
1. Printing is really a tax on all the people that cheapens the money. This can
been done a little at a time and prices will gradually increase. But people
catch on after a while and they push for cost of living increases and such, so
that the inflation does not work. If massive printing takes place financial
institutions are destroyed including government banks. People pay off old debts
in cheap money which will not buy anything. The open market disappears, black
markets proliferate, liberty as lost as the secret police intrude into
everything. Modern nations do not inflate primarily by printing but by easy
credit and marginal reserve banking. The result is the same, but saves paper
and ink.
2. Taxing is not politically valid, for the people will not stand for it, nor
can it survive economically. If the rich are taxed, the money goes into hiding,
off shore, in foreign investments, in long term investments in gold or silver,
etc. The rich have ways. Most taxes on the rich are paid for by the lower
classes because the rich just pass the taxes on through in the cost of goods
and services. Business men must count them in the cost of doing business and
pass them through to their customers. A little wiggle room can be achieved by lying
to the people, promising tax relief until after the election and then reneging
on the promises. The government has a couple years until the next election.
Jobs and industry move overseas, and people blame the "evil"
businessmen for taking their jobs overseas, because the people are too ignorant
to see that it was government taxation that sent the jobs overseas.
3. Borrowing is even more destructive. The lending market always responds to
supply and demand. If the demand for money exceeds the supply, the price of
money [interest] goes up. This increases government budgets as the rates go up
and up as they did in the Carter administration. This also slows business,
because they must stand in line behind the government in order to borrow money
and they must pay a higher rate. The economy slows, only helped a little by
government money poured into favored businesses and banks to keep the
inefficient ones alive and working. These compete with an unfair advantage over
those who are not favored, but efficient, so that the quality of goods and
services decline. When the inevitable scandal occurs, instead of seeing the
villain in government, the government proposes more rules and regulations and
government supervisors to see that quality is maintained. Just like Freddie Mac
and Fannie Mae. The results are boringly predictable.
Solution. The problem is the people, and the people must provide the solution.
As long as the people make government their god and the president their savior,
there is no hope. The cycle will continue and Babylon will be overwhelmed in
debt, despair, and oppression. The people must cast their gods to the moles and
bats and look to the God who created them to provide their daily bread and the
necessities of their lives. They way they are to do this is described in Eph
4:28 "Let him that stole steal no more: but rather let him labor, working
with his hands the thing which is good, that he may have to give to him that
needeth."
The foundation of economic health is not living off the labor of others [as
government does] but doing honest work and showing kindness to those around
you. Simple, isn't it.
