Would You Lend Them Money?

A friend phoned me yesterday to tell me this story - and asked me to blog it. It seems she phoned her bank and inquired about interest rates on fixed deposits. However, the banker insisted on selling my friend government bonds that carried lower interest - but had tax benefits (and also carried free life insurance). However, my friend, being my friend, refused to swallow the pill - and said she did not want to lend her money to our The State.


She then asked me why her bank was so keen on selling government bonds - what was their incentive? - and I advised her not to lend her money to this bank either, and invest in gold.


But think about it: Lending money to The State has never been a good idea - ever. It brought down the Medicis. It will bring down many European banks. Those who lend money to governments buy "permanent irredeemable debt" - and both the interest as well as the principal are paid out of taxes and fresh borrowings. How is this "sustainable"?


Further, those who still buy this permanent irredeemable debt (in peacetime!) are actually partners of the State and therefore enemies of the tax-paying public.


Thus, the Austrian solution is best. If an Austrian comes into office, he will repudiate the entire debt - contracted by the previous government. And he will ensure that such bonds are never issued again - by constitutional law. Whatever government exists (at the local level) must be financed entirely by legitimate taxes.


Incidentally, our The State is increasing its borrowings by 20 percent - above the budgeted amount. This means some 4,00,000 crores of borrowing - to be "consumed" by welfarism. This is unsustainable. This is "capital consumption." This is the highway to "de-civilisation." This is EVIL!

NO MORE GOVERNMENT DEBT