On the Black Hole Sun to the Acid Rain of Government (Austrian Economics) - Part 1

Austrian economics is a black hole sun to the acid rain of government. Which is to say, it is the truth (and the government is not).

Civilization is best ordered in accordance with its principles.

Freedom works.



And the truth will set us free.

This terrific article gets vividly, succintly, and powerfully right to the hearts of the matter.

Some key paragraphs from the article follow (emphasis (bold text, etc.) mine) ...

EXPLAINING MONEY:

• Money is a claim on resources. Where there are resources and productive values, claims can be created on them and there is no problem. But printing more claims does not produce more resources. The government and its printer (the Fed) have no resources except what they take from us. Printing claims enables them to take these resources from us, but it does not expand their amount.

In other words, the bailout can not create wealth. Printing presses (or monetizations of U.S. Treasury debt) can not create capital. The bailout and the printing press can ONLY redistribute wealth. (Which, by the way, is a fancy way of saying "rob Peter to pay Paul." Which, by the way, is wrong (and against the law, unless, apparently, the government is the thief).)

EXPLAINING WHAT GOVERNMENT IS:

• Government is a black hole. It is a field of political power that is so strong that nothing can escape its pull, or so it seems. Once established, it grows.

EXPLAINING GOVERNMENT FINANCE:

• Finance is a final constraint upon a government. When it can no longer finance itself, it fails. When its tax collections fail, it fails. When its printing press no longer seizes enough real capital to sustain the government, it turns to brute force seizure. This brings its political power into the open. As greater awareness of the seizures spreads, capital flees. Capital flees taxes and seizures of all kinds. It goes into hiding domestically. It runs off to foreign havens. This has been going on for many years. It will accelerate. The costs to the government of seizing capital will rise sharply, and this will constrain government.

In other words, people don't like to be robbed. Not all victims will sit idly by and allow government to destroy their accumulated wealth. (As an aside, no one should. The government is not really on your side; there is nothing patriotic about financing evil (theft).)

EXPLAINING THE END GAME:

• According to quantum theory, black holes leak energy (Hawking radiation). [Their] life is finite. Government faces leakage of capital. Capital flees the control of government. The government's life is also finite.
  

In other words, black holes and governments both come to an end because of leakage that, by their very nature, are impossible for them to prevent. Their destruction and failure is inevitable. As the works of Austrian economists - and the principles identified therein - demonstrate.

* * * * *

The Federal Reserve is a castle built on sand. And the acid rain of the government's monetary policy will, inevitably, wash it into the abyss. And then - with God's help - civilization can come on out of the dark and get back to flowering in the light of freedom. [1]

[1] I say "get back to flowering in the light" because this story is very old (see, e.g., 1 Samuel 8 (a vivid account of how a people came to choose centralized government (a king) over God and what a bad idea that was; includes a litany of the kinds of problems this would create, which list, coincidentally, resembles very closely our own Americans' plight under the thumb of our government (except that our tax burden is MUCH more onerous)).