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Tuesday, March 07, 2017

6 Steps Toward A More Sane Economic Policy

As the Trump administration takes shape, it may be helpful to remind ourselves of some of the steps that can be taken in the direction of economic policy that better allows private citizens to be free and flourish. Given his expressed views, there's no reason to believe he plans to radically re-orient the federal government in the direction of freedom and free markets. However, any one of these steps below — even partially implemented — would be a step in the right direction.

One: Eliminate all federal cabinet level agencies related to regulating economic life.
Of the current cabinet level bureaus, the following should be eliminated immediately, including all departments within these bureaus, such as OSHA (within the Department of Labor) and the EPA (customarily accorded cabinet rank):
Agriculture
Commerce
Labor
Energy
Education
Housing and Urban Development
Transportation

The above seven agencies spent $667 billion in 2010, representing 23% of all federal spending.
Two: Eliminate the central bank — the Fed — and scrap legal tender laws.

Of course, a free market must include freedom of its participants to use whatever medium of exchange — money — that it chooses. Money is part and parcel of the market economy. It arises naturally to break the limits of a barter economy, also known as direct exchange. Commodity money becomes indirect exchange, whereby market participants trade for the most widely accepted commodity rather than trade directly to satisfy their ultimate goals. There is no need for the state to dictate what may be used for indirect exchange. Market participants themselves are in the best position to determine which commodity makes the best money.


Furthermore, central bank produced and controlled money has allowed government to act like a common counterfeiter, producing money out of thin air to fund its own spending programs and/or reward its supporters, all at the expense of society as a whole. It is much easier to fund wars and welfare out of printed money than taxes, or borrowing from real savings. The steady erosion of money's purchasing power hits retirees the hardest, diminishing their ability to plan for a retirement of comfort and dignity. Furthermore, the Austrian theory of the business cycle places fiat money expansion as the root cause of the boom/bust cycle that misallocates and eventually destroys capital.

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1 comment:

Anonymous said...

I like the way you think! Less government is better government.