Deficit Spending

Capitalism Requires World War

Capitalism requires World War because Capitalism requires profit and cannot afford the unemployed. The point is capitalism could afford social democracy after the rate of profit was restored thanks to the depression of the 1930’s and the physical destruction of capital during WW2. The underlying nature of Capitalism is cyclical.

"Debt Is The Cause, Not The Cure"

The massive indulgence in debt, what the Austrians refer to as a “credit induced boom”, has now reached its inevitable conclusion. This is one of the primary reasons why economic growth will continue to run at lower levels going into the future. We will witness an economy plagued by more frequent recessionary spats, lower equity market returns and a stagflationary environment as wages remain suppressed while costs of living rise. Correlation or causation? You decide.


The Follies & Fallacies Of Keynesian Economics

Eighty years go, on February 4, 1936, one of the most influential books of the last one hundred years was published, British economist, John Maynard Keynes’s The General Theory of Employment, Interest and Money. With it was born what has become known as Keynesian Economics. In the process Keynes helped undermine what had been three of the essential institutional ingredients of a free-market economy: the gold standard, balanced government budgets, and open competitive markets. In their place Keynes’s legacy has given us paper-money inflation, government deficit spending, and more political intervention throughout the market.

Should Recessions Be Feared & Avoided?

There is no reason to fear recessions or to intervene in them. They represent a healing process. Only by liquidating the malinvestments of the boom and rearranging the economy’s structure of production as quickly as possible to the actual wishes of consumers can a sound recovery be achieved. "Thus, what the government should do, according to the Misesian analysis of the depression, is absolutely nothing. It should, from the point of view of economic health maintain a strict hands off, 'laissez-faire' policy. Anything it does will delay and obstruct the adjustment process of the market."

America's National Debt Bomb Caused By The Welfare State

The news is filled with the everyday zigzags of those competing against each other for the Democrat and Republican Party nominations to run for the presidency of the United States. But one of the most important issues receiving little or no attention in this circus of political power lusting is the long-term danger from the huge and rising Federal government debt.

The Chart Of Doom: When Private Credit Stops Expanding...

Three out of the five major economies are already experiencing stagnant or negative private credit growth. Three down, two to go. Helicopter money--government issued "free money" to households--is no replacement for private credit expansion.

The Bank Of Japan - Ringing In The Keynesian Endgame

The time for more insanity has come... It is the Keynesian mantra: the fact that the policies recommended by Keynesians and monetarists, i.e., deficit spending and money printing, routinely fail to bring about the desired results is not seen as proof that they simply don’t work. It is regarded as evidence that there hasn’t been enough spending and printing yet.

The Keynesian Monetary Quacks Are Lost - Grasping For The Bogeyman Of 1937

What’s a Keynesian monetary quack to do when the economy and markets fail to remain “on message” within a few weeks of grandiose declarations that this time, printing truckloads of money has somehow “worked”, in defiance of centuries of experience, and in blatant violation of sound theory? In the weeks since the largely meaningless December rate hike, numerous armchair central planners, many of whom seem to be pining for even more monetary insanity than the actual planners, have begun to berate the Fed for inadvertently summoning that great bugaboo of modern-day money cranks, the “ghost of 1937”.

Exposing The Fiction Of Mainstream Macroeconomics (In 9 Simple Questions)

The game is simple: we know that macroeconomics is a fiction from top to bottom, the challenge is to expose it as such. Here are some apparently innocent questions to ask of economists, journalists, financial commentators and central bankers, which are designed to expose the contradictions in their economic beliefs. A pretence of economic ignorance by the questioner is best, because it is most disarming.

Why Oil Under $30 Is A Major Problem

Unfortunately, what we are facing now is a predicament, rather than a problem. There is quite likely no good solution. This is a worry. During the last 18 months we have read incessantly that low oil prices, for example, $30 per barrel oil, will stimulate the economy, and the economy will soon bounce back. What is wrong with this story? A lot of things, as we see it...

Why The 10Y Yield Will Slide To 1.75%: Deutsche Bank Explains

"Before investors sell 10s, they need the Fed to pause...  The curve flattens into March 2s10s with risk off market dynamics and an increasing probability of relent, followed by bear steepening after a Fed pause. Rates could then stabilize or decline, depending on whether recession is avoided or at least postponed."

"Markets Crash When They're Oversold"

When markets begin a "bear" cycle, they can remain in an oversold condition for extended periods. There is an important 'truism' to remember - "Markets crash when they’re oversold."

On The Important Role Of Recessions - Austrians Had It Right

The continued misuse of capital and continued erroneous monetary policies have instigated not only the recent downturn but actually 30 years of an insidious slow moving infection that has destroyed the American legacy. “Recessions” should be embraced and utilized to clear the “excesses” that accrue in the economic system during the first half of the economic growth cycle. Trying to delay the inevitable, only makes the inevitable that much worse in the end.