When government becomes the largest actor in the economy

Most people have difficulty believing how the monetary system is a driver of human action. As a more extreme example of this reality, most people find it difficult to see how, for example, the choice of monetary system has an impact on the climate.

We are talking here of the monetary “system” as opposed to the money you carry around in your wallet. It is the system that is in question here. As I never tire to reiterate, even most professionals in the banking and finance industry are unable to name what type of monetary system we are currently on.

The reality is though, that in the current political context where governments have imposed on society the current system, all social and economic dynamics are dictated by this unilateral and arbitrary choice.

Our debt based fiat monetary system requires that the quantity of money must be increased at an accelerating rate. The reason this is so, is cunningly simple. If you task a third party to do something, the third party must be somehow paid for the task. So that if you task a private bank to create the currency of a nation, then the livelihood of said bank consists in creating currency and, unsurprisingly, that’s what they will do.

Expanding the monetary base faster than the pace of the economy brings you inflation.

But just like all dynamics devised and implemented by man, inflation is a dynamic that conforms to the law of diminishing marginal utility. This means that you always require more money to achieve the same result. This also means that as monetary policy loses traction over time, government must gradually but necessarily intervene at ever greater degrees directly in the economy to compensate the loss of monetary traction.

In a debt based fiat monetary system, as government gradually becomes the largest actor in the economy, increased government clout eventually and necessarily becomes government interference and intrusion as the state progressively becomes more fascist in nature.

Proof of this inevitable dynamic is found everywhere but specifically in government employment numbers:

http://www.usatoday.com/news/nation/2010-11-10-1Afedpay10_ST_N.htm?csp=hf

The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds.

Here is an earlier piece of research that never made it into the main stream press:

http://www.financialsensearchive.com/Market/pretti/2009/1030.html

As of now, unfortunately for the US economy as a whole, government employees outnumber US manufacturing sector employees literally just shy of two to one.

If you understand the importance of this trend, you must also understand what the implications are and, let me tell you, they aren’t good. You probably grasp the economic implications of expanded government because you realize that more government employees means more taxes on the private economy. How else is government going to pay its employees? But what probably escapes you is the threat to your life and your personal freedoms that necessarily goes with expanded government due to the concomitant need to justify its existence.

Do you remember this Washington Post piece about the myriad secret security agencies?

http://projects.washingtonpost.com/top-secret-america/articles/

The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work. These are some of the findings of a two-year investigation by The Washington Post that discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight.

Lacking in thorough oversight!

This is how today in the “free” West, we are hell bent on applying police-sate rules upon our open society and why our Boy-Scouts are undergoing military training, or why we are intent on groping passengers if not take their naked picture in the name of security. A “security” that is nothing of the sort in practical terms. And that is why we are hell bent on building straw-men arguments of evil doers outside our borders whom presumably threaten our way of life… as if our own politicians hadn’t already.

No sooner have I posted the above and I hear rumors that the TSA is proposing US$10000.oo for people refusing to be groped and cavity searched at airports.

You people must realize that we are now living in an environment where we are all presumed guilty till proven innocent. If any of you can remember, this was one of the fundamental reasons that people emigrated to the USA at the turn of the last century; whatever happened to being innocent till proven guilty.

http://www.shtfplan.com/headline-news/showdown-tsa-threatens-10000-fine-and-civil-court-if-man-who-refused-scan-and-groping-left-security-area_11152010

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One Response to “When government becomes the largest actor in the economy”

  1. Fascism inexorable ascent « Guido's temple of the absurd Says:

    […] https://guidoromero.wordpress.com/2010/11/16/when-government-becomes-the-largest-actor-in-the-economy… […]

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