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Ladies and gentlemen, it is the time to end gimmicks played by big political parties, with the help of big media, to bluff people into voting for them. Generally speaking the pretext of their election campaigns is that they would end the economic crisis or make economy better by doing this and that. Although, if we have a deeper look on different economic policies practiced by different governments, in last hundred years, we find out that those policies just messed up the economy. Here is what they do. If economy goes worse, they blame previous government’s policies or opposition for failure, and if it goes better they are very quick to claim the credit.
Take the example of 1973-75 recession. This was called as “stagflation” which simply means that both inflation and unemployment were on rise. They have also coined a term called “economic malaise” in order to try to explain and justify it. In accordance with Keynesian theories, the rising inflation and rising unemployment must not happen, together, ever. The very bottom line of their theories is that increasing money supply will end the crisis or make economy better. This is usually done through easy fiscal and monetary policies. We all know that an eased money supply causes inflation. So, inflation is their solution for the economic and financial issues.
Hence, if their theories are correct than with rising inflation the economy must grow, unemployment rates should go down, wages would improve, stock market performs better, and businesses generate more revenues and make more profits. Not true! What if unemployment rates were rising with increasing inflation, as it happened in 1973-75 recession? Oh, No! What do you know? That was not inflation. It was ‘stagflation’. Economy was just having a ‘malaise’. In other words, it was just feeling bad. It was disoriented.
Due to this malaise, economy had no clue what to do, where to go. God forbid, it was not because their theories are grossly incorrect. It was this sickness called ‘malaise’ which was causing all those issues. What a crepe? You know what is having malaise? Their theories and your minds. What about a peak unemployment rate of 9 percent and decline in GDP by 3.2 percent, coupled with serious inflation? Stagflation is a single most important proof that increased money supply does not equals growth and economic well-being. In order to have real strong growth money must be generated by producing something economically worthwhile, not just by “supplying” more easy money.
There are lots and lots of issues attached with “easy supply of money by government”. First and foremost, it is tax payers’ money and government has no moral right to pick winners and losers with it. Government money comes either from taxes or debt. Government itself generates almost no money. It just spends it, and this spending either comes from increased taxes or increased debt. Increased taxes take money away from the lawful owners of that money, the people who earned that money with their hard work or smart investments. Since they earned it, the hard way, they spend it in best possible way on best possible, best value, financially most feasible, most needed and most wanted products and services.
This phenomenon of natural selection by consumers, itself generates lots of value for high value products and services. In this process, the lesser value, lower quality and less efficient products and services are automatically filtered out, and finally go out of business, generating more room for higher value products and services. It keeps, and makes markets even more efficient. Taxes take the money away from this very efficient process of natural selection, and make this process weak, resulting into the slowdown in market improvements.
When this money is transferred to government, through taxation, government has not earned it with hard work or smart investments. This is easy and free money for them. They are like the kids who have no clue about how money is earned and how it should be spent. They want their parents (in this case tax payers) to buy everything and anything for them. It is very hard for them to understand, why their friend has a house which is bigger than theirs? Why their parents have a smaller car? Why can’t they have every new cell phone, every new video game, every new console, every new big screen TV?
If parents can’t do it for them, it is parents’ fault, not theirs. They cannot comprehend that their desires, needs and wants are unlimited, and it is impossible to fulfil all of those, even for the richest parents. They also do not understand that sometimes parents may not want to open their wallets just because they do not want to have very spoiled kids. Governments’ situation is very much the same. They want their parents, otherwise known as tax payers, to buy everything for them, regardless of anything.
If poor taxpayers say enough is enough, no more increase in taxes, it is tax payers’ fault. Government could not understand, why their parents, the tax payers, cannot buy everything from them. For them policing the world, waging wars, doing bloodshed, destroying property, taking away the rights and breaking their oath of allegiance to constitution are the absolutely necessary things they have to do. Tax payers must be able to afford all of that for them. If tax payers try to give them time out, they are bad parents ruing the lives of their kids. Stupid parents (tax payers) don’t know and do not understand anything!
So my friends, what they mean is that government is, for totally unknown reasons, far smarter than you and me, the tax payers. We are idiots. We do not even know, how to spend our hard earned money. We must give all of it to them, and let them spend for us. Sounds familiar? Yes, after all you are not as stupid as government thinks! You guessed it right. This is called “Communism”. That is where we are going, my dear readers of this post. We cannot handle our retirement and we cannot handle our healthcare. Let government take care of it. Are you kidding me?
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