By Al Duncan
Keynesians” theory is named after John Maynard Keynes, a British economist who lived from 1883 to 1946. He”s known as “the father of modern economics.”
A condensed version of the Keynes” theory is that one person”s spending goes toward another person”s earnings and when that person spends their earnings they are, in effect, supporting another person”s earnings.
During the Great Depression people justifiably hoarded money. Under Keynes” theory, this stopped the circular flow of money, causing an economic standstill. Keynes” solution is for government to increase the money supply by lowering interest rates.
You can”t spend your way out of debt.
The Austrian view alternatively advocates complete freedom to contract and trade. It realizes that entrepreneurship is the driving force in economic development, private property is essential to the efficient use of resources and government interference in the market process is always counterproductive. Austrians oppose excessive taxes, price controls and regulations, knowing that all of these inhibit free enterprise and economic growth.
Rep. Ron Paul served in the military, worked his way through college, became an obstetrician and delivered more than 4,000 babies. He also studied economics and he”s been a member of the U.S. House for 13 years. His colleagues call him “Dr. No” because he won”t vote for a bill that opposes the constitution or an issue that violates the people”s rights.
Here”s an excerpt from a recent interview: “Today, we”re barely into the 1932 portion of the Great Depression. The government won”t allow a market correction because it”s too painful. You have to cut spending, you have to deregulate, you have to cut taxes massively, and you have to understand that capital comes from savings, not from borrowing or the printing presses. Government spending money on work projects takes away from productive investment, which is why we”re not having productive growth.
“Today”s movement is rejecting Keynesian economics. But you have to replace it with something and the only reliable economic system is the free market of the Austrian school of sound money and to do that you have to get rid of the Federal Reserve (Fed).”
Dollars backed by gold, limit the amount of dollars printed to the amount of gold held in reserve. This is why Richard Nixon, under the direction of Henry Kissinger, Rockefeller”s right-hand-man, took the U.S. off the Gold Standard in 1971. Fiat currencies aren”t backed by anything. Thus, the printing presses can run incessantly, increasing the number of fiat dollars in circulation and causing inflation. This gives Congress access to unlimited funding without the public realizing that this inflationary process raises their taxes. If, that which cost $1 last year, costs $2 today, you”re taxed on an additional dollar due to inflation. It”s also why Alan Greenspan wrote in 1966: “Deficit spending is simply a scheme for the confiscation of wealth.” For this purpose the bankers created the Fed in 1913. They”re now in collusion with Congress and whether intentionally or not, the people”s wealth is being confiscated. This is why Ron Paul is advocating the elimination of the Fed.
The origin and the destination of all money are the banks. Congress and the banking cartel have an agreement, in which the banks have the privilege of collecting interest on money they don”t have. Banks operate on a fractional reserve system, they can loan 90 percent more than what they actually have in reserves. For every $10 in reserve they can loan $90 they don”t have. This enables the banks to create money out of nothing, but moreover, charge you interest on that nothing. Since all interest is paid by human effort, your labor to pay the interest portion of a bank loan is your gift to the bankers. Since there aren”t enough dollars to pay back all the interest, your labor is exchanged as payment. This is simply a form of modern serfdom in which the people work as indentured servants for the Power Elite. If you understand these two paragraphs, you understand globalism and the new world order.
Here”s an excerpt from Bob Chapman”s newsletter, The International Forecaster: “Historically, without exception, all fiat currencies have failed. The Fed has caused one recession after another and brought the U.S. economy into its second depression in less than 100 years. The Fed, assisted by the U.S. Treasury and Congress, has depreciated the dollar through a colossal creation of money and credit. The dollar has stayed afloat this long only because it”s the world”s reserve currency. Finally this fascist Keynesianism philosophy is being tossed onto the scrap heap with the other failed monetary systems.”
Al Duncan is a local author, businessman and Record-Bee columnist. He can be contacted at alduncan@pacific.net.
