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(Mises Institute)—Many economic pundits predict that the United States and much of the world is either in a recession or about to enter one, depending upon one’s definition of the term “recession.” This brief essay is not intended to be a comprehensive explanation of what causes such economic cycles but rather the proper way to end them as quickly as possible.
Disequilibrium in the Stages of Production
A recession is merely the name for economic dislocations. The stages of production are out of equilibrium. Resources have been allocated to the wrong end products or the wrong stages of production. Consumer preferences have changed, or resources have been allocated by political factors rather than market factors. It really doesn’t matter the cause because the solution is always the same. Get rid of any and all bottlenecks that hinder the reallocation of the factors of production to meet the legitimate desires of the market.
Increasing Private Purchasing Power
There is one huge problem—the welfare state. One, but not all, of the goals of the welfare state is to provide assistance to workers and even companies who find that their cash flow has slowed, as in the case of companies, or even stopped, as in the case of worker layoffs. Government-funded welfare is designed to provide temporary assistance. The problem is that other government outlays are not reduced. No, welfare spending has become “an entitlement” and is always added onto existing spending. This means that the government takes an even-larger bite out of the only economy that matters, the free market economy. Murray N. Rothbard explained that the only spending that matters is “private purchasing power.”
In Making Economic Sense, Rothbard says, “All government taxation and spending diminishes saving and consumption by genuine producers, for the benefit of a parasitic burden of consumption spending by nonproducers.”
He elaborates on the subject in his magnum opus, Man, Economy, and State with Power and Market: “In short, strictly, the government’s productivity is not simply zero, but negative, for it has imposed a loss in productivity upon society.”
Since increased government spending must, by definition, reduce “private purchasing power,” welfare spending hinders the ability of the economy to recover just when more “private purchasing power” is needed most. Resources that should have been reallocated to new products and services desired by the public are instead reduced, not increased! Not only that, but welfare payments tend to disincentivize businesses from taking actions needed to redeploy their capital and to reduce labor’s incentive and ability to relocate or acquire new skills.
End Welfare
The solution is simple but difficult to enact. End both corporate and individual welfare. What? Force businesses to close, and throw great portions of the population into destitution? This need not be the case. It is essential that barriers are removed from reallocating capital and labor to where they are needed most urgently.
Furthermore, just as capitalists must be responsible for the financial health of their companies by saving when times are good and always being sensitive to the needs of the market, labor needs to be just as responsible. Both capital and labor need to save for a rainy day. Capital needs to invest continuously into more-productive processes, and labor needs to invest in personal skills that will be needed in the future. Unfortunately, profits from successful companies are taxed away at a high rate, and labor is subject to propaganda that the state will provide. It is a recipe for long, long recessions. Compare the post–World War I Warren Harding depression with the Herbert Hoover/Franklin D. Roosevelt depression of ten years later. Few know about the Harding depression because it ended so quickly. Everyone has heard of the Hoover/Roosevelt Great Depression of the 1930s.
Harding reduced the federal budget. Hoover and Roosevelt increased the federal budget and placed increased regulatory barriers upon the free reallocation of capital and labor. Lord John Maynard Keynes added insult to injury by abandoning Say’s law that production must precede consumption, enshrining the myth of increasing aggregate demand via money printing, deficits be hanged!
Mysterious “Skyquakes” Are Causing Strange “Booms” in the Sky, and Scientists Have No Explanation
by Michael Snyder
(End of the American Dream)—What is causing the extremely loud “booms” that people are hearing in the sky all over the world? We are being told that “skyquakes” are responsible, but scientists have no idea why these “skyquakes” are occurring. In some cases, the “skyquakes” cause such powerful shaking that…
The Biggest Sale on Long-Term Storage Beef EVER
by Sponsored Post
Let’s cut to the chase. Prepper All-Naturals is offering an unprecedented 40% off for it’s “Beef Steak” survival bags with promo code “steak40”. With a 25-year shelf life and a single ingredient (beef, of course), our most popular product is available for a very limited time with the biggest discount…
Seattle Is Ordered to Stop Blocking Illegal Alien Deportations in the Most Hilarious Court Decision Ever
by PJ Media
A federal court has just pooped in the oatmeal of the West Coast, Messed Coast™governors and local election officials suffering from acute cases of Trump Derangement Syndrome who think they can stop illegal alien deportations. And after this hilarious and thorough legal takedown from the 9th Circuit Court of Appeals,…
Illegal Alien Terror Suspect Found Dead in Cook County Jail Cell
by Slay News
An Islamic illegal alien has been found dead in his jail cell after being arrested on terrorism charges. According to CWBChicago, 22-year-old Sidi Mohamed Abdallahi was found dead at the Cook County jail in Illinois on Saturday. Abdallahi was arrested on felony terrorism and hate crime charges in October. He…
Trump’s Wild Bunch Is Ready for Action
by Frank Miele
If for no other reason than that it will elicit fear in the hearts of autocracy-phobics, I propose that Donald Trump’s second-term Cabinet be known as “The Wild Bunch.” The name is best known as the title of Sam Peckinpah’s classic 1969 western featuring a colorful cast of aging outlaws…
FAA Issues Flight Restrictions Over Questionable Drone Activity Near Trump’s Bedminster Golf Course
by Just The News
The Federal Aviation Administration (FAA) on Tuesday said that it has issued two flight restrictions on the area surrounding President-elect Donald Trump’s Bedminster golf club in New Jersey, following questionable drone activity. The drone sightings were first reported on Nov. 18, but have continued into this week, according to Fox…
Ex-FBI Agent Convicted for Stealing From Jan 6 Defendant During Raid
by Trending Politics
A former Houston-based FBI agent has been convicted of stealing valuables and cash while conducting searches. In one instance, the agent stole cash and silver bars from a non-violent January 6 defendant’s home. Nicholas Anthony Williams, 36, was indicted on January 31 in the Southern District of Texas. Williams, who…
Democrats, Media Elite Urge Biden to Pardon Trump’s Alleged ‘Enemies List’
by Breitbart
President Joe Biden should issue preemptive pardons to his political allies and those deemed to be on President-elect Donald Trump’s alleged “enemies list,” Democrats and their media allies believe. Delivering a preemptive pardon indicates an admission of guilt, although Democrats claim a preemptive pardon would only be intended to block…
Fani Willis Forced to Release All Communications With Jack Smith, J6 Committee
by Trending Politics
The Fulton County Superior Court has ruled against District Attorney Fani Willis, ordering her to disclose communications with Special Counsel Jack Smith and the House January 6 Committee. The decision, announced on Tuesday, follows a lawsuit brought by Judicial Watch, a conservative watchdog group, which accused Willis of violating Georgia’s…
Lindsey Graham Is the Warmongering NeoCon Leading the Charge to Upend Pete Hegseth
by JD Rucker
Pete Hegseth represents a shift away from the wokeness that has infected the United States military. This is possibly the biggest reason President-Elect Donald Trump tapped him to be the next Secretary of Defense and the vast majority of Republicans on Capitol Hill can support this, at least for the…
‘Where Are Black Democrats?’: Charles Payne Tells Personal Story to Call Out ‘Huge Double Standard’ of Biden Family
by Nicole Silverio, DCNF
(DCNF)—Fox Business host Charles Payne called out the alleged “huge double standard” of President Joe Biden’s family Tuesday by revealing that his brother, who struggles with a crack addiction, is currently serving a jail sentence. Payne said his brother, who is getting out of jail on Friday, is likely one…
Zelensky Admits Ukraine Can’t Retake All Its Land: ‘We Must Seek Diplomatic Means’
by Breitbart
Ukrainian President Volodymyr Zelensky conceded in an interview on Tuesday that Ukraine does not have “enough forces” to restore sovereignty over Russian-occupied Crimea and “must seek diplomatic means” to end the Russian invasion and regain its land. The state-run Ukrinform outlet reported that Zelensky described Crimea – which Russia colonized…
Ultra-Processed Foods: How Bad Are They for Your Health?
by Olivia Cook
(Natural News)—Despite the serious health risks associated with eating junk food, they remain the most consumed food products in many countries, particularly developed ones. But a review published in The BMJ, which studied 9.8 million people, warns that eating a lot of ultra-processed foods can increase your risk for 32 diseases. Among these are heart…
“Already Pretty Far Down the Line”: The Container Store Could File for Bankruptcy as Soon as Next Year
by Tyler Durden, Zero Hedge
(Zero Hedge)—As the retail apocalypse that started with Amazon and e-commerce continues, the latest victim is The Container Store. The retail giant could file for bankruptcy as soon as next year, according to the New York Post, who said the retailer is blaming its recent descent on “a weak housing…
Mysterious ‘Car-Sized Drones’ Over New Jersey Prompt FBI Investigation
by Zero Hedge
Several weeks of mysterious drone swarms over the skies of one New Jersey county near the military research and manufacturing facility Picatinny Arsenal have sparked concerns among residents and prompted an FBI investigation. “It’s kind of unsettling,” Mike Walsh, a Morris County resident who has spotted the drones on numerous…
UNESCO’s New Mission: Train Influencers About Combatting Online “Misinformation”
by Reclaim the Net
The UN Educational, Scientific and Cultural Organization (UNESCO) is now incorporating teaching influencers how to “fact check” into its activities. UNESCO claims that influencers have become “primary sources of news and cultural information” around the world – which prompted it to carry out a survey into how these online personalities…
