An Avalanche of Austerity Is Coming One Way or Another
by Mark Luedtke
We’re the stupidest people in history. Early Americans bequeathed us wealth previously unimagined because they understood economics and the nature of government. With the exception of the very first colonies in the US, which were almost exterminated by socialism, well-educated Americans managed to keep the burden of government small for three centuries. Because of that, they created capital, a structure of production and wealth unequalled.
But at the beginning of the 20th century, Americans empowered Teddy Roosevelt and progressives to take over the Republican Party. Then they empowered Woodrow Wilson and progressives to take over the Democrat Party. Since then, we’ve had one party rule. The two factions of the progressive party have used warfare, welfare and divisive non-issues to divide and plunder us through rapidly advancing socialism for a century. All of Marx’s ten precursors for communism have been largely implemented in the U.S. and are supported by both progressive factions.
As soon as they took power, progressives implemented the progressive income tax. It’s been with us so long that nobody wants it abolished. They also seized control of our money supply by implementing the Federal Reserve. Both these institutions are Marxist institutions of plunder. The IRS plunders us visibly, so Americans meekly resist higher taxes. But the Fed plunders invisibly, and because of that, it has plundered us to a far greater extent. We’re a few months behind the Europeans on the road to catastrophic economic collapse.
To our great detriment, Americans today are mis-educated in government prison-schools. Early Americans knew that individuals act out of self-interest. In the private sector, that means people create something of value and voluntarily exchange it for other goods. Since both parties value what they receive more than what they give up, voluntary exchange creates wealth which benefits everybody. Voluntary exchange advances civilization.
On the other hand, the state is a coercive institution. Every action it takes is a threat of violence backed by violence against the people. It funds itself by theft. Therefore, every action it takes destroys wealth and harms society. The state can only hinder growth. It drags civilization backward toward the Stone Age.
Government plunders us in three ways. The first is spending. Every dollar government spends removes goods – steel, concrete, fabric, trucks, etc. – from the private economy where the people could have used them to create wealth and advance society and squanders them for the benefit of our rulers, making everyone else poorer. Regulations restrict voluntary exchange and competition, retarding the creation of wealth, bankrupting small businesses and creating giant corporations indentured to government. But printing funny-money is the most insidious way government plunders us. The Fed creates dollars by buying government debt from banks, so every dollar the Fed creates is a dollar of debt. Banks then use those dollars as a basis for more loans, creating more dollars via debt. Americans think of the dollar as a stock or a representation of production. They’re wrong. Every dollar is a dollar of debt. The more dollars in circulation, the deeper in debt we are. We’re drowning in debt, worse than Greece.
Plus, when the Fed creates dollars, GDP automatically goes up because prices rise even though no new production has occurred. The so-called recovery is a sham. The GDP increase is an accounting gimmick driven by inflation and government’s destruction of wealth. GDP is a misleading statistic invented by government stooges to fool people into believing government spending is good for us.
But the plundering will stop because there is no more wealth to plunder. We’re bankrupt. We’re consuming capital. The biggest bubble in history – government’s debt bubble – is popping. All governments will default. Unprecedented damage has already been done, government intervention is doing more, but the consequences are just becoming apparent. The best we can do is stop the plundering now to minimize the damage, then recover as quickly as possible.
Mark Luedtke is an electrical engineer with a degree from the University of Cincinnati and currently works for a Dayton attorney. He can be reached at MarkLuedtke@DaytonCityPaper.com.