Later
“Expansion of bank money causes an artificial lowering of the interest rates, and an artificial and uneconomic overinvestment in capital goods: machinery, plant, industrial raw materials, construction projects. As long as the inflationary expansion of money and bank credit continues, the unsoundness of this process remains hidden, and the economy can ride on the well-known euphoria of the boom; but when the bank credit expansion finally stops, and stop it must if we are to avoid a runaway inflation, then the day of reckoning will have arrived.” Murray Rothbard.
Happened time and again throughout the course of human history. Debasing the money and inflationary monetary policies cause a boom. Everyone gets drunk and has a good time. Entrepreneurs often receive misleading signals about the availability of capital. Money starts flowing into expensive long-term projects in the hope that the boom will last forever. Ultimately, debased money and inflationary monetary policies start causing inflation at an increasingly higher pace. Inflation means that the days of abundant inflationary money supply are over. Either inflationary policies end, or the economy goes down the drain with hyperinflation, and a bust ensues. A bust occurs when real savings and investments do not support the money supply. As a result, the debased and inflationary fiat money goes to reckless, unsustainable projects that ultimately collapse, and a boom turns into a bust.
The story started in 1913 with the inception of the IRS and the Federal Reserve. Income tax enforced by the IRS, coupled with the Fed’s increased ability to expand the money supply by fiat, significantly accelerated the American decline that the War on Tariffs initiated in the mid-nineteenth century. The first major disaster caused by the IRS and the Fed was the United States’ involvement in World War I, which was impossible without this expanded supply of money. The war ended, but the expansion in the fiat money supply did not shrink much. The expansion of the fiat money supply contributed to the Roaring Twenties. As predicted by the Austrian Business Cycle theory, a bust followed the boost, and the Great Depression ensued. The role of Depression in the business cycle is to cancel inflation with deflation and let malinvestments meet their ultimate destiny, bankruptcy. Deflation enables people to save more effectively. Savings encourage real investments, that is, investments backed up by real savings. Investments improve the employment situation, and the economic engine starts functioning in its natural order. But thanks to the Federal Reserve and Roosevelt’s progressive welfare agenda, the government made every possible intervention to block natural correction.
Roosevelt’s progressive agenda was actually part two of Hoover’s programs. Highly expanded progressive social welfare programs, along with involvement in World War II, significantly accelerated our path toward big government. Public opinion was overwhelmingly against participation in World War II. To manipulate the public opinion in favor of involvement in WWII, despite beforehand knowledge of the oncoming Japanese attack on Pearl Harbor, the Roosevelt administration closed their eyes and let the Japanese come. Public opinion shifted in favor of going to war overnight.
On the other hand, the inception of the republic and the establishment of the Democratic states completely changed the concept of war. It was no longer a quarrel between two monarchs. Now, war was an ideological phenomenon fought between the “People” of two “Nations”. Taxes increased astronomically, and regulations and economic interventions became the norm. The government sent young people forcefully to war in the name of the “Draft”. The primary purpose of war was not to expand territory. It was to convert the ideological frameworks of the warring nations.
Blockades, bombardments on cities, Concentration camps, destroying the infrastructure, and destruction of industries and fields became integral parts of the war strategy. War was also a massive milestone in the building of mass formation psychosis strategies. Problem, reaction, solution was a key component. Creating a problem out of thin air and blowing it up to the max was the goal. Demonize the enemy and present it as a life-and-death situation for everyone. The government diverted the critically essential resources to the war efforts. The concept of mass destruction also evolved quickly. The target was to destroy the enemy’s population and economy indiscriminately. All this was made possible by governments between the people who had a lot in common. People who stopped the war on Christmas and played a soccer game. Governments made brothers mass murder brothers.
Problem, reaction, solution, and mass formation psychosis became a permanent part of government expansion strategies—Korean War, Vietnam War, 9/11, Iraq War, Syria, and Arab-Israel all are raised and handled with the same approach. The government expands significantly in every instance and never returns to its orginal size after the fact. Natural rights are often eroded and never fully restored to their pre-incidence levels.
The government repeated the same story in the COVID-19 Fiasco. The COVID-19 virus is turning out to be even less dangerous than the Influenza virus. The government converted it into an extinction-level threat. Governments enforced the lockdowns and shutdowns worldwide. Masks were mandated. Governments paralyzed the economies. Governments expanded the fiat money supply to unbelievable levels. Corporate and public welfare reached new heights. Businesses that had been running for generations closed their doors. Grandparents died without seeing their grandkids before their death. Families did not hold funerals for their loved ones. People canceled public and family events due to shutdowns, or highly restricted events took place due to lockdown regulations. Critically ill cardiac patients and other patients died due to a lack of care and preventive care.
Reporting meta-analysis published in his book, “Did Lockdowns Work”? (2023; coauthored with Jonas Herby and Lars Jonung) Steve Hanke said:
“Based on specific NPIs, we estimate that the average lockdown in Europe and the United States in the spring of 2020 reduced COVID-19 mortality by 10.7%. This mortality rate translates into approximately 23,000 avoidable deaths in Europe and 16,000 in the United States.
In comparison, there are approximately 72,000 flu deaths in Europe and 38,000 in the United States each year.”
Where NPIs are Non-Pharmaceutical Interventions.
So, all that printing of money, corporate welfare, destruction of economies, violations of natural rights, coercion, and cancel culture benefited us little or not at all.