One of the less well-known economists of the Austrian School was Professor Antal Fekete who died in 2020. Fekete arguably had a much better grasp of monetary issues than many of his contemporaries. His works are still available on his website, and one in particular details why debt must necessarily grow exponentially in a fiat currency system.
Every year monetary authorities must create at least as much new money as needed to service outstanding debt, in order to keep the game of musical chairs going.
Governments have lost not only their option to reduce indebtedness but, more ominously, the option to balance their budgets. There is a new item in the budget that is never named, that is well-hidden, but that is increasing by leaps and bounds year after year: that part of government borrowing that is needed to provide cover for the increase of the monetary base.
The utterances of politicians about their resolve to eliminate the budget deficit is disingenuous – it cannot be done under the prevailing monetary regime on a net basis.
What if … you knew that all governments live in a fiat currency world. What would you do? About 6 years ago someone hit me in the side of the head with a fish. I realized that fiat currency is a feature of the economy. If you can’t take advantage of that then you are the fish and not the fish eater. So get on board the winner train and plan for that useless currency. It’s actually pretty easy. Can you figure it out?
Fekete makes a very important point that I characterize as “inflate or die.” The monetary authorities have a choice of either ever increasing the rate of inflation or face a deflationary bust of epic proportions. I am placing my bet that they will always chose the inflation.
I got about half way through and realized I didn’t have a clue what he was talking about.
The “money changers” manipulated the value of the currency required to pay the tax.
So he tipped over their tables (records) and drove them out of the temple.
Calling them what they were. Thieves.
If a foot (a measure) was quietly shrinking inch by inch, or a pound ounce by ounce.
All money in circulation is borrowed into circulation. So when we haul money back to our lender as “interest” this leaves un-payed principal. Debt.
The point of the system is to make governments and individuals beholden to those who hold the debt.
“Paper money eventually goes down to its intrinsic value – zero.” Voltaire (1729)
There’s another reason more money must be printed. The welfare state. And I don’t mean to imply only poor and needy people … but also the forever-war military industrial complex. And the global Warming charade. There are SO MANY people suckling at the Deep Mamma teat … that there’s no option but to keep spending … spending … SPENDING!!!
If the Spending stops … then all those people who no longer have a teat to suckle are gonna get mad. …government toppling mad.
So the short version is?
We be f*cked!
For there is no practical means by which public debt,incurred by our Parasitic Overload,can be repaid.
Just an ever steeper dive into slavery,for those who produce things of value.
And ever greater theft by those who take.
I can see this ending well.
Trudeaus Canada.
A bankrupt welfare state of thuggery.
Human nature is so sweet,when all our choices are gone,so all our restraints have vanished..
The joke of communism..We pretend to work,they pretend to pay us..
Well in Can Ahh Duh,work all you want,none of the reward for doing so will remain yours to enjoy..
The next logical step?
The State of Thuggery will attempt to compel production,demanding ever more payment from fewer and fewer people.
In other words..taxes on taxes on taxes,with less and less money coming in to government coffers.
And defaults on every promise made …
Oh wait…
Like “Healthcare”.
Good government indeed.
National Debt is treason.
Moderation?
OK
The fall of Rome took hundreds of years. The fall of the US (and the west) will be measured in decades, slowly at first then suddenly. We are now on the cusp of suddenly.
This is obsolete thinking. Govt needs resources because it has none of its own. Govt doesn’t care where the resources come from, taxed or borrowed, as long as it gets them. So, is it better to tax a community or borrow from it?
The answer is borrow and always!
We shall be a far freer and wealthier nation when govt must come cap in hand to its people for a perpetual loan!
Blessed are the meek for they shall inherit the earth.
The article should have been titled, An End of Tyranny!
https://www.realclearmarkets.com/articles/2021/03/31/a_case_for_government_as_a_borrower_to_end_tyranny_770572.html