Inflation
J.McLaughlin Homepage
America was the first country in human history built from the bottom up. It started with Anarchy, and especially in the West, it stayed that way for a long time. In the meantime, America did miracles. Within two hundred years, it became the world’s largest and richest economy, built the largest and most prosperous middle class ever, and achieved the fastest declines in poverty rates ever. It also had open borders for trade and immigration. There was no welfare system, though. So, only highly creative, competitive, innovative, inventive, entrepreneurial, and hard-working people used to come. People were ready to take on challenges and were willing to start from scratch to build better lives for themselves and their families.
Right near the point when America was hitting its leadership point in economic progress and financial strength, at the beginning of the twentieth century, Americans started behaving like spoiled rich kids. The war on poverty began when poverty rates were declining quickly for decades. However, after well over a century since the beginning of this war, and after spending trillions over trillions of dollars, the poverty rates have been either going up or have remained steady. In 1913, the Federal Reserve and IRS came into existence. Among the stated purposes of the Federal Reserve was to prevent inflation and recessions. But in reality, one dollar in 1913 was equal to 35 dollars today. That is the success the Fed has achieved in controlling inflation.
Recessions have become much more frequent and profound, although many economic indicators that would have been considered recession in 1913 are now declared normal by the Fed. Unemployment has also either gone up or remained steady, yet it is another massive failure of the Fed. Although the government never accepted it, the real purpose of the IRS was to nationalize the incomes, and it has certainly achieved that goal very efficiently. Americans who revolted against 2% tax on tea, are on average now paying 40% of their incomes in taxes to the most violent, most inefficient, most corrupt, most stealing, most crony and most lying institution ever invented by humans i.e., the government.
Hayek was dead right in his analysis, which he did in the nineteen forties when he predicted we would be worse than surfs. After all, surfs used to pay a quarter to one-third of their crops to lords. We are already way past that point, and there seems to be no end. Politicians, bureaucrats, media gurus, experts, technocrats, and academia still cannot stop complaining about the lack of funds for the government, its departments, and agencies. The solution to all failures, all inefficiencies, all incompetence, all corruption, all waste, and all negligence seems to be more money. So, funding increases frequently, the government gets bigger, spending increases, debt increases, deficits increase, and taxation increases. But performance never improves. It gets worse in most cases.
While taxation and inflation, thanks to the trillions printed by the Fed to finance warfare and welfare, taxation and inflation are breaking the backs of hard-working Americans, the government’s appetite for more money and power keeps increasing. Both parties continue to play each other. Every government gets elected on the promise of decreasing warfare or welfare, depending upon which party we are talking about, but elected government increases both welfare and warfare. Both parties get votes on keeping the borders open or closing them, but none even dare to mention the underlying problem. The problem is not immigration. America has always had open borders, attracting the best minds worldwide.
They increased the size of the pie and, in the end, benefitted everyone, even the people living outside America, in an unprecedented way. That changed with the inception and growth of the welfare system. An ever-increasing proportion of immigrants is now comprised of freeloaders. They do not increase the size of the pie; they become a burden on taxpayers, the economy, finances, resources, security, and safety. The problem is not even legal or illegal. This is an entirely artificial, arbitrary, and political divide. If the person adds to the economy, it does not matter if he or she came illegally or legally. But, if immigrants become a burden on the economy because they do not work, want subsidized housing, food stamps, free healthcare, free education, and child care again, it does not matter if they came legally or illegally.
The real problem is if there is honey, flies will come. It is impossible to stop this flood of freeloaders as long as the welfare system exists. Plus, there is so much corruption in the welfare system that no one can do anything about it. The bureaucrats running these systems survive and thrive on failures. If the problem goes away, then they have no jobs. If the situation worsens, they get more funding, higher pay, better benefits, and more power and authority. So, what should any intelligent and logical person expect from them? Of course, there is more inefficiency, abuse, and corruption. You can see it everywhere. More funding for schools only worsens the performance, for example.
The defense is intensely and deeply corrupt, and the level of waste is incredible. Crony contractors are paid several times higher than market prices. The number and size of black ops that have immunity from audits keep increasing dangerously. Nobody knows where that money goes, how it is used, on what it is used, or by whom. The Pentagon is missing trillions that no one has the slightest and remotest clue about.
So, stop falling for the highly deceptive political slogans. The whole government is smelling bad at an excruciating level. Instead of accepting superficial solutions, ask for the bottom line to be fixed. This tree cannot be fixed by cutting the branches anymore. It needs to be rooted out. Inflation will not go away as long as the Federal Reserve exists. The immigration problem is not going to be resolved until and unless the welfare system is demolished. The standard of living, buying power, and business strength will not return as long as the IRS exists. Ever-growing thousands of pages of regulations will not go away as long as every congressman and woman is made one hundred percent responsible, in an authentic way, for every regulation he or she voted for, even after retirement and leaving Congress for life.
