We Are Reaching The Tipping Point.
Teeter Totter (Photo credit: lambdachialpha)
Consumption is starting to over take production as these charts show. Government spending is an exchange of confiscated, borrowed, or counterfeited dollars for a good or service that has been produced. These dollars represent certificates of purchase that can be exchanged for anything produced in the market. Legal tender laws decree that these dollars have to be accepted for all debts, public or private. The Fed has a legal monopoly on money production, and the fact that the Fed has counterfeited 3 trillion plus dollars since 2008 means that they have stolen 3 trillion dollars worth of goods and services from the private sector over the last four years.
Read this previous post, “Counterfeiting By The Federal Reserve, Although Legal, Still Results In Theft.”
The charts from this article, When Work Is Punished: The Tragedy Of America’s Welfare State., at Zerohedge.com, show our inescapable problem if we continue these policies. The productive private sector will be over run by the parasitic public sector. The tipping point is approaching quickly. If you want to gaze into a crystal ball and see our future, look at Greece. Read “Greek Unemployment Hits Escape Velocity, at Zerohedge.com.
Here are some quotes and charts from the article.
“But perhaps the scariest chart in the entire presentation is the following summarizing the unsustainable welfare burden on current taxpayers:”
- For every 1.65 employed persons in the private sector, 1 person receives welfare assistance
- For every 1.25 employed persons in the private sector, 1 person receives welfare assistance or works for the government.
“The punchline: 110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.”
“And since nothing has changed in the past two years, and in fact the situation has gotten progressively (pardon the pun) worse, here is our conclusion on this topic from two years ago:”
Related articles
- Capital Consumption, aka, Eating Our Seed Corn. (austrianaddict.com)
- The Fed’s Policies Are Counterproductive. (austrianaddict.com)
- A Look Over The Horizen At What Lies Ahead If We Continue Down The Central Planning Road. (austrianaddict.com)
- Why Do People Think The Government Is The Economy? (austrianaddict.com)
Tags: Counterfeit, Government spending, Private sector, Public sector, Welfare
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AUSTRIAN ECONOMICS ADDICT 
April 27, 2013 at 11:17 am
“The Fed has a legal monopoly on money production, and the fact that the Fed has counterfeited 3 trillion plus dollars since 2008 means that they have stolen 3 trillion dollars worth of goods and services from the private sector over the last four years.”
How is population growth accounted for? If a population grows without a corresponding growth in currency, would that not cause deflation? And if the currency is to be increased to correspond with an increase in population, how is it increased without theft? What I mean by that is, how is the freshly printed currency injected into the economy without the “injector” spending it? Any thoughts? Any books that you would recomend that would answer these questions?
April 27, 2013 at 3:08 pm
Danny
Population can grow in relation to our ability to produce enough to sustain it. If we didn’t have tractors, combines, planters, etc, and still used draft animals and manual labor to produce food, we wouldn’t be able to feed as large a population as their is today. This also applies to housing, clothing, transportation, etc. Actual goods are what create wealth not money. When we exchange our money for a good, we are actually exchanging a portion of what we have produced. A good for a good. Money is what we use to make exchanges easier. It would be difficult for me to exchange the hat I produce for the cow the farmer produces. Money is a way we calculate the ratio’s between different goods. For Example, A pair of shoes exchange for 75 candy bars, but it is hard to exchange 1/75th of a pair of shoes for 1 candy bar. In a money economy, the shoes sell for $75s and the candy bar for 75cents. Money is not wealth, the things we produce are wealth, money just facilitates exchanging what we produce.
The idea of money came about through exchange in a barter economy. In a barter economy people exchanged goods because of their their value in direct use. Because of the difficulty of finding a person who produced what you wanted, and also wanted what you produced, people started to exchange for a good that they didn’t necessarily for its direct use but one they knew they could easily exchange for what they wanted. They wanted the good for it’s value in exchange. As this process evolved over time, gold and silver became the commodities that people accepted in any exchange because they knew they could exchange them for anything they wanted. The ratios between different goods were now calculated in ounces of gold or silver, instead of three coconuts for a fish. This is how the idea of money came about.
If the money supply is inelastic, doesn’t grow, will that result in a deflation? Yes. Is that bad? No. If you have an expanding amount of production, and a constant money supply, all this means is that the purchasing power of money will increase. The exchange ratios [prices], of everything will adjust as more is produced. The Fed counterfeiting money is inflation. If the Fed had not been counterfeiting, you would never walk by a penny lying on the ground. You would pick it up because it would have more purchasing power than a penny has in today’s world. A penny could conceivably be worth 50 cents worth of today’s purchasing power. There would be half a cent, quarter of a cent, and tenth of a cent coins in circulation. If gold was still used as money there would be 1/50th oz, 1/75th oz, and 1/100th oz gold coins.
This is a very difficult concept to understand, it took a lot of reading and time for me to understand it. I wrote a post titled, “We’re All Born In The Middle Of The Story”, it talks about the difficulty of understanding how things that existed the day we were born came to exist. Money is no exception, we were born in a paper money world and we don’t understand what money is, how it came about, or how our paper money system came into existence. The only reason Government could have grown as big as it has, is because they took us off of hard money and put us on paper money.
Three books that will help you understand this more are,
What Has Government Done To Our Money, and
The Case Against The Fed, both by Murray Rothbard.
Paper Money Collapse, by Detlev Schlichter.
Go to the blog roll on my site and you’ll find Rothbard’s books on mises.org, and the other book on Detlev Schlichter.
Thanks for commenting,
austrianaddict.