Socialism will never endure in the European Union (EU) or the United States as the tenets of a controlled economy are inherently fatally flawed. Just look to the EU today as it slowly, but surely, crumbles into the dustbin of history. A monument to men's egos that have promulgated the centrally controlled economics & social welfare state. How much more suffering the Europeans will tolerate is unknown. What is known, is that people with nothing to loose, loose it, and will be driven into civil disorder to survive. So, let's look at the solution.
Briefly, here are the basic tenets of Austrian economics, or supply side economics as some will call it. The main points are:
- Free market 'pricing mechanisms;'
- Sound money;
- Reduced Tax Rates;
- No interventions or enabling from a central bank system;
- Smoothing out of the business cycle by eliminating boom-bust cycles;
""Without a foundation of sound money, a market-determined money, cycles are inevitable and destructive not only of short-term economic well-being but potentially destructive of long-term freedom and prosperity. It is urgent then that policy makers take seriously Hayek's proposal, developed during the economic crisis of the 1970s, for drastic monetary reform, for a "denationalization of money."" (John P. Cochran)
"Sound money then is money whose purchasing power and quantity are determined by consumers' and producers' valuations, preferences, knowledge, and resources — that is, a market-determined commodity money absent government intervention." (Ludwig von Mises)
""Central-bank response to the most recent crisis and slow recovery has moved in the direction of greater, not lesser, central-bank involvement in the economy. Recent troubling trends include money creation to finance massive government deficits, the Fed engaging in "modustrial policy," and becoming a gigantic financial central planner."" (John P. Cochran)
To read further on these tenets, John P. Cochrane has testified before the Subcommittee on Domestic Monetary Policy and Technology of the Committee on Financial Services, US House of Representatives re "Fractional Reserve Banking and Central Banking as Sources of Economic Instability: The Sound Money Alternative," June 28, 2012.
This Fall, you will likely hear these issues in some form of a political debate. The cat is out of the bag now worldwide as economies revisit the depression. As an informed citizen, familiarizing oneself with this information you can help others become aware. The current economic system must be reformed, much in the same way as returning to Constitutional principles.
"Every decent man is ashamed of the government he lives under" H.L. Mencken
Coincidentally, last night comes the release of a story concerning an e-mail sent by Sec. of the Treasury, Timothy Geithner, followed by a correspondence 'dump' of documents from the New York Federal Reserve Bank today regarding the manipulation of the Libor Interbank Offered Rate that is supposedly 'set' by corresponding banks in London & New York. It appears from the released documents, that the US & UK central banks have colluded in the manipulation of the rates. These rates are used to determine the underlying rates on US home mortgages, credit cards & various other loans & securities worldwide.
Obviously, when the central bankers distort interest rates, the true pricing of money will never be obtained. This is Keynesian policies gone wild. This mispricing of money has contributed to the housing bubble that is costing homeowners & taxpayers considerable hardship. The problems are in our face; the solutions are within our grasp. Mitt Romney must make as one of his top priorities to improve the economy & create the climate for job growth, the reformation of the US banking system. It is imperative.