Re: Federal Deficit Soars
Can you provide us with any examples of capitalistic countries that have no governments?
I can provide examples of capitalistic systems that didn't have a government. These cities formed without any government at all.
Los Angeles. Las Vegas. Seattle. New Orleans. New York. Dallas. Phoenix. San Francisco, Sacramento, and just about every other city in the United States.
These cities were founded by people who used capitalism to bring up an economy far enough they desired to form their own government to keep out the thieves and murderers. It was capitalism that brought these initial settlers, and later others that joined them, out of the jungle and into civilization.
To argue that these cities could not have formed out of the wilderness without the action of a government is a presentism fallacy.
These people formed their OWN government AFTER their economy had been built. While they were building that economy, there was NO CITY government. There was NO STATE government. They were totally without government at all.
Yet they formed their own society out of the wilderness.
States are built of those cities coming together along with those in the country, to form a common cause. Nations are build of States, coming together under a common cause.
The more capitalism is allowed to run free in a society (be it a nation, State, county, or city), the more prosperous that bit of society will be. Capitalism is the only system that creates wealth. Socialism can only exist by stealing wealth.
Government is not necessarily evil. It is not necessarily good. They are useful for helping to establish standards (such as what an 'inch' is, what an 'ounce' is, or what a 'dollar' is (which is actually a unit of weight). They can also provide services like common defense needs, and help keep thieves, murderers, rapists, etc. under some kind of control. The latter is best handled by local governments.
It is not a legitimate government function to manage an economy. It was never authorized by our constitution either. Essentially then, the Federal Reserve itself is illegal. Price controls, even price controls on money itself, never work. It is the Fed that reduces the price of money when it should be higher, causing people to borrow at a time when people are spending. This is destructive. It forms speculative bubbles that eventually must burst. The Fed again, sees it too late, and tries to raise the price of money when people are gambling. The bubble bursts. How far it goes depends on the level of interdependencies between loans banks made to each other as part of this speculative atmosphere.
Boom.Bust. Housing boom to bust. Stock market boom to bust (the type of downturn starting what later became the Great Depression, and same thing with the dot com bust).
The Fed causes it all. It is during the easy money times that the damage is being done. It is when the Fed pulls back slightly to cool an overheated economy (too late!) that often triggers the bust (if something else doesn't trigger it first!). It is the Fed that provides the easy money that people use to speculate with. The continue it too long because they don't understand that people are gambling, not stimulating the economy.
Keynesian economics is a failed model. It is money management. It is price controls on money itself.
