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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!
‘Merely Coincidental’: Secular Scientist Work Overtime to Explain Away the Miracles of Christ
by Harbingers Daily
Was the miracle of Jesus feeding the 5,000 with just five loaves and two fish a little less than miraculous? Well, that’s what a group of scientists are claiming in a recent paper published in a scientific journal. Instead of a supernatural provision by the Lord, they claim the feeding…
Google Hosts Party for Democratic Operatives Plotting To ‘Resist the Republican Agenda’
by Free Beacon
The resistance’s bar tab is on Google. Priorities USA, a top Democratic super PAC with an affiliated dark money group, is convening a summit of left-wing digital activists on Wednesday afternoon to deliver a post-mortem on Vice President Kamala Harris’s election loss and strategize how to “resist the Republican agenda,”…
“The Correction Before the Surge”: Why Gold and Silver’s Future Is Brighter Than Ever
by Sponsored Post
It was long overdue by most estimates. Precious metals prices have been steadily rising for far longer than even the …
Ukraine Denies Reports From Think Tank That It Is Months Away From Developing a Nuclear Weapon
by Natural News
Ukraine has denied reports suggesting it could develop a nuclear weapon soon, following claims by a Ukrainian military think tank. The report, published by the Ukrainian think tank and nongovernmental organization the Center for Army, Conversion and Disarmament Studies, claimed that Kyiv could use spent nuclear fuel from its remaining…
Alex Jones Reveals Elon Musk Saved Infowars From Being Sold to The Onion
by End Times Headlines
Alex Jones has declared ‘the cavalry is here’ as attorneys for Elon Musk’s X jumped in to help put a temporary pause on the sale of his controversial Infowars to The Onion. The satirical news publication said the bid was sanctioned by the families of Sandy Hook Elementary victims who…
FBI Whistleblower Says FBI Intentionally Blocking Security Clearances for Trump Officials
by The Conservative Treehouse
It should not come as a surprise to see the same methods deployed against President Trump in 2024 that were used by the FBI in 2016. The difference is now that President Trump understands the full power of his office in the security clearance process and that he doesn’t need…
Pastor Greg Locke Burns Voodoo Doll He Claims Was Found on His Property
by End Times Headlines
Even amid ongoing warfare, we are called to stand firm on the Word of God. Pastor Greg Locke knows well the spiritual and physical attacks directed at him; he was recently targeted by a gunman. Now, he faces another spiritual assault, this time from someone attempting to place a curse…
Trump’s Incoming FCC Chief Already Putting Target on Big Tech ‘Censorship Cartel’
by WND
Social media companies have become a “cartel” for suppressing information with which they disagree, and that agenda now is going to be getting the attention of Brendan Carr, President-elect Donald Trump’s pick to be the chairman of the Federal Communications Commission. It was social media companies who played a role…
Sabotage: Two Undersea Internet Cables Connecting Four NATO Nations Were Severed
by Publius
Many in the international community are claiming sabotage as the only viable explanation for two fiber optic internet cables in the Baltic Sea being severed less than 24-hours apart. Fingers are being pointed at Russia as one of the the cables connected NATO nations Germany and Finland. The latter was…
Pennsylvania Supreme Court Orders Democrats to Immediately End Counting of Illegal Ballots
by Infowars
The Pennsylvania Supreme Court on Monday ordered Democrats in several counties to immediately halt their unlawful counting of illegal ballots in the Senate race recount. The Pennsylvania Supreme Court had ruled before the election that mail-in ballots lacking formally required signatures or dates should not be included in official results….
22-Year-Old Woman With Depression Was Almost Euthanized, She Changed Her Mind Right Before She Was Killed
by Life News
Why do you oppose euthanasia, Wesley? If people want to die, we should help them die. No. And here’s an individual example explaining just one reason why. A deeply depressed woman was about to be lethally injected in the Netherlands — but changed her mind just in the nick of…
“Massive Breach”: T-Mobile Network Hacked by Chinese State Sponsored Intelligence
by Tyler Durden, Zero Hedge
(Zero Hedge)—Where’s John Legere in a pink t-shirt when you need him? Among the multiple stories over the last few weeks about Chinese intelligence and hackers either attempting to, or outright gaining access, to U.S. cell phone networks (with reports stating President Trump and his team were targeted), comes news…
Trump’s Idea to Shut Down Department of Education Gets High Five From Top Christian Evangelist
by WND
A priority for the incoming administration of President-elect Donald Trump is to tackle the Deep State, the bureaucracy in Washington that is a self-perpetuating industry, to find what American taxpayers don’t need or want. And get rid of it. One of the targets he’s already identified is the Department of…
Experts Sound Alarm Over ‘Shocking’ Spike in Strokes Among ‘Healthy’ Young People
by Slay News
Health experts have issued a chilling warning to the public over a “shocking” spike in strokes among “healthy” young people. The “alarming” surge was identified in official UK government data. The data shows that recorded cases of deadly strokes skyrocketed in 2023 and continued soaring this year. In 2023/24, the…
