Ep. 1449 The Boatload of Real-Life Examples Keynesians Have to Ignore

Ep. 1449 The Boatload of Real-Life Examples Keynesians Have to Ignore



the Tom would show episode 1449 prepared a set fire to the index card of allowable opinion your daily dose of Liberty education starts here the Tom woods show hopes the school year is winding down as I record this and it's soon gonna be time to think about next year's homeschool curriculum well how about getting your mental health back and not running yourself ragged as a homeschooling parent anymore by using the self-taught Ron Paul curriculum your children will get a top-notch education in all the standard subjects plus they'll learn how to start their own home business how to be an effective public speaker how to manage their money the kind of topics that don't get taught anywhere Plus get 160 dollars worth of free bonuses when you subscribe to the curriculum through Ron Paul homeschool calm everybody Tom woods here today what I want to do is well more or less reproduce a talk I gave aboard the contra cruise which recently concluded we of course as you probably know sailed to Alaska this time and had a just a tremendous week together and yes by the way there will be a 2020 contra cruise but probably not till October of 2020 so there's plenty of time between now and then and I wanted to use this episode to take the talk I gave aboard the cruise and more or less reproduce it for you here now I don't want you to be left with the impression that the cruise is a bunch of speeches because that certainly is not Bob and I generally give each of us one talk that's sort of academic or at least let's say has some kind of intellectual heft to it but then most of the time we're just having a really good time socializing playing games having excursions exploring interesting places things like that but I did give a talk this time around in which I looked at Bob's new book and I pulled out a lot of ideas and particularly a lot of empirical examples because what happens a lot when we're dealing with Keynes Ian's is that we Austrians or we libertarians are treated as if we're just blind ideologue who make statements really on the basis our philosophical preconceptions that we're not looking at economic scientifically we see the results we want to see right we're we're dogmatic and unreasonable whereas the Keynesian czar the ones who just roll up their sleeves and they collect the data and they just they let the data take them where where it will and and that's just not the case at all it's just not the case at all that to the contrary it's the Keynesian 's who are blinded by ideology because as I'm going to show there's just example after example of situations that they cannot explain without extraordinary mental gymnastics so it really is the opposite of the impression that the Keynesian is leave with people that they are the scientists or just following the evidence where it leads them and we're the blinded ideologues who regardless of the evidence are gonna stick with our you know our crazy deranged preconceptions and indeed conclusions so the book of course as many of you know because you've heard me talk about it on this show has the same name as the podcast that Bob and I do every week and that is contra Krugman and the subtitle is smashing the errors of America's most famous Keynesian I'm quite fond of that subtitle I actually came up with that subtitle that does not have Bob written all over it that actually is Tom there anyway so first I actually want to start with something that is not so empirical but it's theoretical just because I think it does help to understand when the Austrians are looking at what's happening in let's say depressed economic times they have a very sophisticated way of thinking about not only what's happening but what the best approach should be or at least what what a very poor or inadvisable approach might be and here I refer to an article Bob wrote that is included in this book called does depression economics change the rules now a lot of us who are libertarians are very fond of pointing out the broken window fallacy of Frederic Bastiat and I think a lot of libertarians think that was that answers pretty much all of Keynesianism because as you'll recall Frederic Bastiat who lived in first half of the 19th century would speak of what we refer to as the broken window fallacy by saying you know let's imagine you have a kid he throws a baseball through a window the window smashes and normal people look at that and say well that's a very bad thing because there's been property damage and now the owner has to pay for it but then the economists well let's put it this way the very bad economist comes along and says no no it's actually a good thing that the window was smashed because look at the employment that will be encouraged you know this window repairman now has a job you know he's gonna come and replace the the window and and so on and then and then this will lead to other economic activity and all that and so they say so isn't this great actually that destruction has occurred because it's gonna stimulate economic activity that normal people think destruction of property is not a good thing but the economists in the example say ah no no you haven't thought about it deeply enough but of course it's the economists so called in that example who hasn't thought about it deeply enough because the point is if I the owner hadn't had to spend my money on replacing the window I would have had let's say the window had been broken the first place I would had a window that was solid and in place and the money that I had to spend if the window were broken could have been spent on something else and I would know then then something else would have been done so instead of just having a repaired window I'd have a window that's in good working order plus something else so in other words instead of just maintaining what I already had we could have expanded our output but instead of being able to expand our output were able only to maintain what we already had namely a window and so this fallacy of the broken window meaning that the idea that the broken window could actually lead to prosperity we see this all over the place and I every time there's a natural disaster people say isn't it great that the earthquake is gonna create jobs and things like that and it just makes everybody pull their hair out and and we're always saying but this is just a broken window fallacy all over again a lot of times people will say see when the keynesian x' want to do fiscal stimulus they want to spend a lot of money during depressed economic times people will say well if you're creating economic activity through this additional government spending you're just pulling it away from somewhere else and so it's at best awash in the same way that in the broken window fallacy we're supposed to think that economic activity is being stimulated because look at the work that's being done but you're just pulling that worker away from something else he might have done otherwise and so it's you're not actually creating prosperity but what the Keynesian zl– say is they do have a response to this it's not like they haven't thought about the broken window fallacy what they'll say is yes what you libertarians are saying and what you Austrians are saying does hold true under conditions of full employment let's say when the economy's resources are virtually all in service in one way or another that laborers are all employed and the factories are churning things out then yes it's true that if we fund a bridge project somewhere then all the resources to build that bridge are gonna come from some part of the economy that's already humming along so we're gonna have to take workers that are already gainfully employed and move them over to the bridge project so it's true that it is kind of a wash and physical resources that are being used for some things will now have to be diverted to the use of the bridge so yeah we're not on net creating anything that's true that they would recognize that in that situation they say what we're talking about is the case of a depressed economy an economy where a lot of resources are sitting there idle and that are not being used of so of course the major resources not being used as labor during a depression there's a lot of unemployment and Keynesian would say that when there's unemployment then in that case basically what there plizz lee saying is if a window gets broken there and we pull some guy out to go fix it it's not like we're pulling him away from something else he might have been doing he's not doing anything he's sitting at home playing video games he's unemployed and a lot of the physical resources that we might need like the glass itself let's say it's not like though that's all being used for other production processes no it's not because there are factories that are idle a lot of production processes are just idle right now that's what makes it a depression you have idle resources so if we try to stimulate these resources back into use through fiscal stimulus spending government money on a lot of projects it's not that we're just shuffling resources around we're just taking workers from some occupations and now putting them into occupations paid for by the government we're taking workers who weren't doing anything and we're stimulating them into activity so that's a net good it's not just a wash it's a net good and that's the way the Keynesian is described what they're up to so Bob then handles this in two ways the first way is to say all right let's let's take this at face value we have unemployed resources like factories and various material factors and labor they're just sitting around in a recession that's what makes it a recession but how could you create a government funded project let's say a bridge project that could precisely draw only on the resources that are currently unemployed how could you possibly do that and so as bob says you want to build a bridge you're not just gonna need cranes and just labor in general you're gonna have to burn gasoline to transport the newly employed workers to and from the worksite you're gonna need nails and screws and steel and lumber and other resources to channel into this bridge at least some of those inputs are gonna be diverted away from other private sector uses they're not just gonna be leaving a state of idleness and then also this category of labor like labor is just homogeneous or something this is a similar situation he says let's suppose the city of Houston wants to build a bridge is it really the case that every last person even remotely involved with the project will come from the ranks of the unemployed and the unemployed who happen to be within commuting distance of the Houston bridge site obviously the project is going to draw on engineers construct and Foreman and other skilled workers who were still gainfully employed even in the recession and who therefore will not be able to work on as many private sector projects as the otherwise would have and so as Bob puts it thinking about the housing bust and the financial crisis the the terrible economic conditions of 2008 he says is it really the case that bridges and roads require labor and other inputs in the same proportions as housing construction and finance does the construction of a new sewer system require the services of investment bankers and roof layers in such combinations that local government spending can perfectly offset the bursting of a housing bubble well obviously that's a rhetorical question that answers itself you couldn't devise such a project that would draw only on unemployed resources so even if the Keynesian analysis is correct you couldn't do it you could not succeed in doing it you would necessarily be drawing at least some resources out of the private sector and therefore and obviously by the way when you draw resources out of the private sector into the public sector so-called you're gonna be now deploying them arbitrarily in the private sector they're responding to profit and loss which is society's way of saying this is what we want you to do this is what we don't want you to do whereas in the government sector when the government sector takes over the resources how do they know what to do with them they don't have any profit and loss feedback it's all arbitrary it's all politically motivated it's all consumption but then Bob goes at it from a second angle and he says all right let's look at this more fundamentally why are the resources idle in the first place why do we have all these idle resources instead of just treating idle resources if they just fall from heaven all of a sudden one day we look around there is just people sitting around unemployed and factories that are not at capacity or not being used or whatever all these resources are idle why don't we bother to ask why and it reminds me of something Krugman said around the time of the financial crisis he said how tired he was getting a people who put in so much time figuring out how we got into this mess as opposed to figuring out how we get out of it if the two things aren't related how could you get out of something you didn't know how you got into right how would you know you weren't doing the same thing that got you into the problem so Bob proposes that we consider why the resources are idle in the first place so even if in practice the Keynesian could figure out how to come up with a project that would whose needs would precisely match the unemployed resources that exist Bob says well the reason that resources are idle is and and here we have the Austrian business cycle theory no here I won't reproduce that because I've talked about it a lot I mean just you can just google Tom woods or Thomas woods Austrian business cycle theory but the gist of it is that during the boom itself during the economic boom that's fueled a Fed induced Federal Reserve induced boom what happens is that artificially low interest rates tend to channel entrepreneurial activity into longer-term projects because when you when interest rates are are lower those longer projects look much more attractive because they're more sensitive to interest rates I mean if you have a 30-year mortgage you'll know exactly what I mean if that interest rate comes down even a fraction of a percentage point it can have a significant effect on your monthly payment and that's true of long-term investment projects as well that the the more interest rates come down the more of the in effect monthly payments for those projects come down disproportionately and so it makes those projects now look more favorable then they they look more desirable to investors so it screws up the time aspect of production it it leads to more long-term projects being started but but this is all misleading the resources to complete these projects are don't actually exist and so the low interest rate is misleading entrepreneurs into doing things that won't be sustainable in the long run so the idle resources are caused by the economy catching up with reality and saying wait a minute this combination of projects and resources can't be sustained indefinitely we have to go back to the drawing board stop what we're doing we have to stop what we're doing and reassess what we've got what consumer demand really is which industries really would prosper without Federal Reserve intervention and would prosper because consumers actually want them we have to figure all this out and that's gonna take some time so the last thing we want to do is stimulate economic activity we don't want to stimulate the current configuration of resources this configuration is unhealthy its unsustainable it was fueled by artificial interference with the economy we don't want to just stimulate that back into activity we want to rearrange it into something healthy and here's how Bob puts it I mean remember that essay I pencil by Leonard read about just how complicated it is to assemble even a single pencil that that's what Bob's referring to here he says this was and is a fantastically complex reshuffling of in other words of reshuffling of resources after a Fed induced boom now we have to figure out where should these resources really go so bob says this was and is a fantastically complex reshuffling because even simply as simple as producing a pencil requires the contributions of thousands of workers all over the world it's not a simple matter of moving unemployed builders and hedge fund managers into booming sectors XY and Z because as we've seen above these newly employed workers will require complementary tools and resources that were not laid off to the same extent so the issue is what is the best new outlet for all these laid off workers such that all things considered the final mix of output goods best satisfies consumer desires how can we be sure that channeling them into occupation X won't actually do more harm than good and the only way we can know that is through the price system that emerges spontaneously on the market now that's kind of a theoretical case for why government stimulus is a bad idea a stimulus spending you're stimulating a dead patient you know I mean that's not gonna ultimately be a good idea what you want now here the dead patient analogy breaks down a bit but what we want is to rearrange the existing configuration of resources we don't want to try to make it go again it doesn't work it doesn't fit together and so we need to let entrepreneurs rearrange it all right now and again remember I'm drawing all this from Bob's book contra krugman which you should get contra krugman book.com I am the narrator of the audio book version and you can get that if you haven't signed up for audible yet you can get that for free and it's a long book you're gonna learn a lot from and get it for free through Tom woods audio com anyway Bob points out that the European Central Bank did a study where it looked at historical episodes where Belgium Ireland Spain the Netherlands and Finland reduced their budget deficits and basically found that all of them benefited in the long run and what was particularly impressive and surprising about a piece of this particularly because of the source of it that it's coming from the European Central Bank of all places is that it placed emphasis on spending cuts in particular as being a much better way of closing a budget than raising taxes well then Bob in his own work has also done the study of Canada as an example of what we might call expansionary austerity because there you had a case where you had a country where the wall street journal' referred to it as having become an honorary member of the third world in the unmanageability of its debt problem but the Canadians rolled up their sleeves and dealt with the problem from 1995 to 97 total federal government spending fell by more than 7 percent the budget deficit of 32 billion dollars which was 4% of GDP became a two and a half billion dollar surplus there were tax increases but the ratio of spending cuts to tax increases was about 5 to 1 then that Federal Government of Canada ran 11 consecutive budget surpluses and that caused the debt to GDP ratio to plummet from 78 percent in 96 to just 39 percent in oh seven well so then what happened what was the economic performance of Canada well from 1996 to 2005 the IMF shows that Canada's average growth of real GDP was point three percent the US was the runner-up with 3.2 percent average growth and the g7 excluding Canada averaged only 2.1 percent growth now it's true that in all these cases if you were a Keynesian you could find some way to say well there's this mitigating factor or that one this is why this case doesn't invalidate my approach and this is why that case doesn't invalidate my approach yeah you can do that you can do that as the examples pile up you're gonna find that harder and harder because fewer and fewer people are going to be persuaded by that it's gonna sound like special pleading so bear in mind the point of this is not to say that these empirical examples prove that we're right and they're wrong it's they're the ones who say they're gonna live and die by empirical example so we're just bringing them up impertinent of us as it is we're bringing them up and conversely when we look at the Keynesian approach and the Keynesian side of things and we look for where are there examples of Keynesian pump priming Keynesian fiscal stimulus working well at least we can say we've got empirical examples of countries that slash their budget deficits and then had great results we can at least show that and you may say well that didn't have anything to do with their great result whatever it is like you can you can argue that it's hard for a Keynesian to argue that because they should have had bad results basically but they didn't so the question then becomes well what positive examples do the Keynes in other words do they have anything that corresponds to the examples I just gave you Canada and all those other countries do they have examples for their point of view that they can use and the answer is they really don't the best they can come up with is well here's a case where we used fiscal stimulus and things would have been worse if we hadn't used it they don't say here's a case where we use fiscal stimulus and everything turned around it's always things would have been worse we didn't use it or well okay but maybe but maybe not I mean that's not what kind of an example is that if they can't even show us one the best they can show us is well things would have been worse if we if we hadn't done it but I mean imagine you got a medicine that you give to patients and every single time you give it to them they die is your first instinct to say well the dosage must be off I mean it could be I'm not saying that's impossible but was your first instinct be the dosage must be off or wouldn't you think well let's keep an open mind about whether this whole approach is sensible you know you would think if you were scientific minded as the Keynesian claimed to be that that that is the position you take so here's an interesting quotation now in Bob's usual style he doesn't reveal to you until the end that it's Krugman himself who said these things I'm gonna reveal that he simply quotes a Nobel laureate in economics yeah who could that be who wrote in 1998 the following and basically what he's writing is and I'm just gonna give you an excerpt of it he's basically saying we really can think of only one example of fiscal stimulus yielding recovery and even this one example doesn't really work so here's Krugman zone words the end of the depression which is the usual indeed perhaps the sole motivating example for the view that a one-time fiscal stimulus can produce sustained recovery does not actually appear to fit the storyline too well so as that statement makes clear as of 1998 Krugman himself thought that there were arguably zero historical examples of a large fiscal stimulus rescuing an economy from a deep recession so you know there is that then Bob looks at a well known widely cited paper by Reinhart and Rogoff called growth in a time of death and the basic summary of that paper is that if a country's government debt gets above 90 percent of GDP it crosses a tipping point and significantly impairs growth the relationship between government debt and real GDP growth is weak for debt to GDP ratios below 90 percent but once you hit 90 percent something happens and growth is significantly impaired so now Krugman's got to deal with that because he's the one who's always telling us we shouldn't worry about debt so he says all right we'll look the key things in this paper they're dealing with the United States and the UK immediately after World War two Japan after 1995 Canada in the mid 90s Belgium and Italy since the late 1980s and so bob says all right we had the five examples from the ECB report now we've got these four and so Bob says now he has to explain away nine examples and meanwhile he admits he hasn't got a single one that even the depression doesn't really work so he has no examples for his view we've got at least these nine and yeah I mean again he can do special pleading for every single one of those but is an impartial observer really gonna think if seeing this evidence really gonna think well I guess it's a toss-up as to which side is right all right let me move on ahead to another topic and I covered a little bit more than this in my talk aboard the cruise but you had to be there I'll just say you had to be there we're doing it again next year and we'll give you information as soon as we have it anyway Bob and also did heroic work when Krugman came out and proposed that the housing bubble didn't really have anything to do with the job losses we were seeing in the recession in 2008 so Krugman says this that the Austrian theory of the business cycle doesn't explain why recessions reduce employment across the board not just in industries that were bloated by a bubble and Krugman says the current slump is affecting some non housing bubble states as much or more severely as the epicenters of the bubble and so bob says all right you did not miss read that Krugman is here saying that the bursting of the housing bubble doesn't help explain the onset of the recession so Bob then looks closely at it and says well look at what Krugman is looking at in his table he's looking at the change in unemployment in different states to see which states were most affected you know which states had the worst changes in employment and see if that corresponds to the states that had the worst swings and housing prices and to see if there's a connection but he's looking from December 2007 to December 2008 bob says the bubble had well burst by December 2007 why would you choose those dates unless you just try to come up with the wrong results so Bob says well why don't we check this relationship by you know going from the top of the bubble to the end of 2008 so Bob says let's go 2nd quarter 2006 that's the top of the bubble and Bob says then I so I'm gonna look at housing prices from the top of the bubble to the end of to the bursting of it and then the other variable of course will be the change in unemployment and again we'll do that from June 2006 to December 2008 so he looked at the states that had the biggest percentage decline in home prices and then the states that had the biggest increases in the unemployment rate and then compared them to see if if they're the same states he's got a ranking of the the worst six states under each category under increase in unemployment and drop in housing prices so there are six states under each one there's only one in each list that doesn't match and Bob says that seems like a very strong correlation which is an understatement because as he says depending on how we frame the problem the chances of this matching occurring randomly are anywhere from one in 8400 to about 1 in 350,000 who are the scientists now then Bob wants to go on and explain that yes of course the Austrians can account for why there would be across-the-board drops in unemployment not just in let's say housing or financial engineering or whatever and he says remember there's a distortion of the capital structure and in a modern economy which is so interlocked that distortion can obviously lead to a general rise in unemployment across many sectors as all these mistake and investments are that have affected almost every nook and cranny of the economy are flushed out of the system and then also remember too that the economy is not just coping with the after-effects of a Federal Reserve induced boom that the economy is also coping with the measures to so-called solve the crisis so the economy also has to deal with the government seizing Fannie and Freddie so basically nationalizing a huge portion of the US housing market the Treasury secretary telling everybody that he needed seven hundred billion dollars pronto to patch up the financial sector then the Treasury secretary partially naturalizes the financial sector then the federal government takes over to out of the big three car companies and in dealing with bankruptcy there through traditional creditor rights out the window so that spooks the economy then the Fed more than doubles the monetary base in six months time then the new Obama administration borrows almost eight hundred billion dollars to spend on stimulus then a giant leap forward towards socialized medicine and then just for kicks the federal government also banned offshore drilling although the rules are yet again undergoing revision bob says at the time so he says it's no surprise the US economy is suffering a slump throughout all major industries even though it's been years since the housing bubble peaked all these sorts of things undermine entrepreneurship capital formation and the certainty investors have that crazy wild things won't keep being done to the US economy they can actually invest with some peace of mind now further bob says what would an Austrian expect to find employment wise well we would expect a general drop across the board as people experience the shock of the housing and stock market crashes and therefore postpone a lot of purchases this hoarding so-called corresponds to a legitimate change in the way real resources are deployed when everybody suddenly realizes there aren't enough capital goods to support this structure of production things need to come to a halt while entrepreneurs reevaluate their operations in light of this new information and then but also apart from the economy as a whole which as you can see Austrians can quite easily account for Austrian business cycle theory does make predictions about the relative impacts on particular sectors so the so-called higher order or more capital-intensive and indeed more interest rate-sensitive sectors of the economy are gonna tend to crash much harder than the lower order sectors such as retail okay so if you have the Keynesian view that a recession is just a general drop in aggregate demand then there shouldn't be any particular relationship among individual sectors and how they respond both in magnitude and across time and that's what Krugman says that's what his story means that a recession is just a drop in demand so that drop in demand is no reason that it should be clustered in particular sectors but the Ostrom point of view is that it should we should expect it to be clustered in particular sectors those sectors that are most affected by artificially low interest rates and that responded in ways that are basically on economic so now let's think we would expect that if we're looking at construction employment durable goods manufacturing and non durable goods manufacturing well in the Austrian framework construction is the highest order of these because things that construction producers are very capital-intensive and they provide a flow of services for decades then would be durable goods manufacturing and then the lowest order of these categories would be non durable goods manufacturing so if the Keynesian view is correct all of these should have been hit exactly the same because it's all just a drop in demand okay but it turns out guess what the construction sector took a larger hit than manufacturing in general and construction has been brutalized compared to the mild downturn in non durable goods manufacturing so in other words exactly as the Austrians predicted the worst hit was in construction second worst hit was in durable goods manufacturing and the most mild consequences were felt in non durable goods manufacturing so again who are the scientists here alright now there's a lot more that I said in my talk but for now that ought to whet your appetite that ought to make you say wow I I've not heard this before I have not gotten this kind of analysis before well Bob's got a huge book full of just relentless this if you like this you can get relentless this in Bob's book so I urge you to check that out Contra Krugman book calm is where you can pick it up it is so fantastic so well done if you prefer audiobooks go to Tom woods audio comm and type in Contra Krugman and you can get it for free and don't worry Bob still gets his royalty and if you don't want to be subscribed to audible you can get your free audiobook and then cancel it so you got a free book for yourself so definitely check that out Tom woods audio com I'll link to the book and that page if you happen to forget the later on you think I know I was listening to episode 14 49 all right Tom woods complex 1449 will have that link for you okay tomorrow we're talking about the coup in Iran in 1953 operation Ajax which involved the CIA that's a topic I'm surprised I haven't covered yet but it's an important one we'll be talking about that tomorrow so you do not want to miss that see that become a smarter libertarian in just 30 minutes a day visit Tom woods calm to subscribe to the show for free and we'll see you next time like the sound of the Tom would show my audio production is provided by pods worth media check them out at pods worth com

7 thoughts on “Ep. 1449 The Boatload of Real-Life Examples Keynesians Have to Ignore

  1. If anyone here is interested in testing the idea of UBI instead of just having their opinions confirmed, check this out: https://www.youtube.com/watch?v=yL9vdLBn9uM

  2. 16:05
    Leonard Read's "I, Pencil". An example that was used frequently by Dr. Milton Friedman. It is also a perfect way to introduce concepts of free market advocacy to children (as well as adults).

  3. The income tax code is used by government as a way to influence human behavior. The same can be said of the government's manipulation of interest rates.

  4. Monetarists deeply believe that the power of money comes from being spent, ie., it's ability to command people and resources, ie., that wealth is consumption. They often regard savings as having value only when it is eventually spent. They insist that there is no difference between money that arises by means of the voluntary interactions of free and sovereign individuals,… and money that arises from threats of violence from the state if their money is not voluntarily accepted,… that there is no difference between money that arises from public debt, or the equivalent of printing presses, or from savings, or actual production of value that is voluntarily accepted by it's recipients.

    Basically Austrians don't believe in even the possibility that a cult of philosopher kings can ever be presumed to make better decisions for people with better outcomes than what people actually choose for themselves. How is it that in the world today this opinion is largely regarded by all correct thinking people as either being extreme,… or merely eccentric,… but never worthy of serious consideration. We regard every individual human being as each being a moral end, each unto themselves. We presume that individual people are trustworthy,… until, by their individual actions, they prove otherwise. We trust people to be able to rule their own lives better than having others rule them instead. I am amazed that this attitude bewilders those who trust authority alone.

    it is difficult to get a man to understand something when his income depends on his not understanding it.

    ~ Henry Louis Mencken

    A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on the majority always votes for the candidates promising the most benefits from the Public Treasury with a result that a democracy always collapses over loose fiscal policy always followed by dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through the following sequence:

    · From Bondage to Spiritual Faith
    · From Spiritual Faith to Great Courage

    · From Courage to Liberty

    · From Liberty to Abundance

    · From Abundance to Selfishness

    · From Selfishness to Complacency

    · From Complacency to Apathy

    · From Apathy to Dependency

    · From Dependency back into Bondage

    ~ Alexander Fraser Tytler

    18th century Historian and Jurist

    Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.

    ~ George Washington

    I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity… is but swindling futurity on a large scale.

    ~ Thomas Jefferson

    When the people find that they can vote themselves money, that will herald the end of the republic.

    ~ Benjamin Franklin

    If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one….

    ~ James Madison, letter to Edmund Pendleton, January 21, 1792

    No legal tender law is ever needed to make men take good money; its only use is to make them take bad money.

    ~ Stephen T. Byington

    The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.

    ~ Alexis de Tocqueville

    While boasting of our noble deeds we're careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.

    ~ Horace Greeley

    If you ask me to name the proudest distinction of Americans, I would choose — because it contains all the distinctions of the others — the fact that they were the people who created the phrase 'to make money'. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity — to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality.

    ~ Ayn Rand, Atlas Shrugged

    Politicians never accuse you of 'greed' for wanting other people's money – only for wanting to keep your own money.

    ~ Joseph Sobran

  5. Keynesianism is the idea that a man can pull the levers of the economy while taking none of the blame when a wrong lever is pulled.

  6. So we need to get rid of all tax-breaks. Implementing tax breaks is pseudo-socialism. Also, I still don't see why UBI is a bad idea…It doesn't create artificial demand in any specific sector. It leaves the market in control.

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