If someone incurred debts against you as an individual, without your knowledge or consent, you would call it identity theft. You would call your bank for a full accounting of the debts incurred in your name, and after some verification, those debts would be declared invalid and you would not be held responsible for them. Furthermore, if the culprit was found, they would be prosecuted and sent to jail.
Not so with governments and central banks. Governments that are supposed to be of the people and for the people routinely incur debts against the people. Some governments even borrow money to oppress their citizens, and then expect them to pay for their own oppression with interest. With a fiat monetary system, the sky is the limit for how much debt a government can place on the backs of the people.
Bravo, Dr. Paul! Well said.
Read the full article.
After reading the article you might wonder what "deficit financing" is all about. If so, here is Ludwig von Mises himself on the subject, in an article scripted from lecture notes, so he appears to be talking to you. Mises says deficit financing should be called "printing money." It causes inflation - as he explains. And that is also a kind of theft the State routinely commits.
Conclusion: Our Total Chacha State is a thief. Period.
Ron Paul is a great politician. The world needs such politicians, but can they make an impression on sufficient number of people in order to win elections.
ReplyDeleteIn fact, I am surprised that Ron Paul has achieved such phenomenal success, even though he is a Libertarian.
I don’t think India can produce a politician like Ron Paul in a million years. Our political system will always be “Leftist Vs. Leftist.”
People are basically corrupt, they don’t want to do hard work, they would rather subsist on doles from the government.
But I hope Ron Paul succeeds. His success in the “Rotten Apple” might inspire some “real hope and change” in India.
Look.
ReplyDeleteThe difference between Ron Paul and Indian politicians can be defined in the constitution. Our constitution , to put it bluntly, was written by a group of extremely short-sighted people. We never set out what we wanted to do. And Indira made us socialist by definition.
A Ron Paul in India can succeed only, and only when, we remove the welfare state politics that has permeated everything. Our internal divisions are only getting stronger...the fault lines are getting visible now. I don't like Rahul Gandhi at all (I've never seen a bigger mofo), but really, if he can at least unify us on some level, maybe a real libertarian can work from there. I see no other unifier. For true liberty to work, we need to see our nation in a new light.
Sauvik,
ReplyDeleteDeficits are not necessarily inflationary. New paper money is not being created when financed through selling bonds to the public.I'll quote a few free market theorists here.
Quoting George Reisman "Deficits financed by borrowing from the public-i.e., through the sale of securities to individuals and business firms-are not inflationary.Only deficits financed by the creation of new and additional money is inflationary."
Quoting Henry Hazlitt "People frequently talk as if a budget deficit were in itself both a necessary and a sufficient cause of inflation. A budget deficit, however, if fully financed by the sale of government bonds paid for out of real savings, need not cause inflation. And even a budget surplus, on the other hand, is not an assurance against inflation."
Quoting Murray Rothbard "Deficits are inflationary to the extent that they are financed by the Banking system; they are not inflationary to the extent they are underwritten by the public."
When deficits are financed by selling bonds to the public, people simply draw down their bank deposits to pay for the bonds, which the treasury spends.There is no creation of new paper money.Money is simply being transferred from the public to the treasury, which it spends.Obviously Government spending is harmful and has disastrous consequences.
Regards,
Shanu A
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ReplyDelete@Shanu: Yet, deficits funded by borrowing are also ruinous, causing capital consumption. They are ruining the world. They are the cause of a huge "moral hazards" - as this post on the Natural Order Blog explains:
ReplyDeletehttp://naturalorder.ufm.edu/?p=305
The root problems, of course, are unsound money and central banking.