Government as the largest actor in the economy

This is what happens in a monetary system where money is debt and electoral politics is the enabling tool of the monetary authority

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2 Responses to “Government as the largest actor in the economy”

  1. guidoamm Says:

    I agree. Recession is part of any healthy economic system. Without the involvement of politicians, that is all we would experience. However, as politicians are meant to be seen doing something, attempting to prevent naturally occurring recessions only prepares the ground for greater dislocations later.

    Following a war and assuming the West wins, government involvement is guaranteed to increase. The reason we need a war is two fold: we need to obliterate industrial capacity and we need to write down all sovereign debt held by Asian countries.

    Only then can the inflationary dynamic start again.

  2. Patrick Donnelly Says:

    The Depression is part of the cure. Government involvement should decline, even if there is a war in conventional terms. Voters will or will not clamour for more involvement, but who will pay for that? Dropping the value of fiat currency used to be easy….

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