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A Couple Thoughts on Government Intervention

Our government for several administrations now seems unable or unwilling to grasp the simple economics involved in prosperity. It shouldn't be that hard; after all, low taxes, stable money, and lack of government price and wage "fixing" were largely responsible for the massive US economic growth between 1879 and 1914 (railroads not included), and sweepingly, for every other boom in American history. 

Here are two quotes to consider:

"The economics establishment still has not been able to absorb the rather simple idea that inflation is bad for economies (and thus employment), and a stable currency is good." Nathan Lewis

"Inflation: This is not only a policy imposed for its own sake [so government's can invisibly tax their people], but an inevitable result of most of the other interventionist policies. It stands today as the universal symbol of government intervention everywhere."  Henry Hazlitt

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7 responses to “A Couple Thoughts on Government Intervention”

  1. mitch crider Avatar
    mitch crider

    weakening the u.s. dollar makes those that hold our debt very happy…what is wrong with slower growth to stabalize the economy

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  2. Jerry Goidosik Avatar
    Jerry Goidosik

    Chis Reading a great book from around that time period called the workman it was published in 1877 from the American Track society it is the best easy read on our economic system that I have ever read.

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  3. Dennis Perry Avatar
    Dennis Perry

    Chris,
    I would love to hear you insite to this video.
    DP
    http://www.youtube.com/watch?v=7BxiEJcOoo0&feature=player_embedded

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  4. Lucas Moldenhauer Avatar
    Lucas Moldenhauer

    Thanks Chris,
    I could never figure out how inflation would help government tax us more until I read Dinesh D’Souza on Ronald Reagan. He explained how inflation puts people into higher tax brackets…thus new taxation without representation. It was a huge “Aha” moment!
    Thanks for your insights.
    Lucas Moldenhauer

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  5. Cathy - Team Rascals Avatar
    Cathy – Team Rascals

    Chris,
    Far too often, modern governments are to economies what the classic fellow was to the goose who layed the golden eggs: He killed the goose to get to the eggs, without any concept he was killing the very source of the golden eggs!
    Any kind of taxation, whether it be inflation or not, is bad for an economy. And what is bad for the economy is, in the long term, bad for government revenues.
    If those in power want more money to flow in, they should stop trying to take it out. I know, to the uninitiated, that sounds like insane reasoning, but please bear with me.
    When those in power stop trying to take it out and loosen the reigns on the economy, the economy reacts positively. People save and spend more. They invest more, secure in the knowledge the money has a better chance to grow. In turn, jobs are created, more wealth flows. Finally, more taxes are paid and more revenues flow into the government.
    It doesn’t happen overnight. Often, the process takes 3 to 5 years from loosening the reigns to the government feeling its strongest growth in revenues. It takes patience with the process, and unfortunately most politicians are quick-fix tinkering kind of folks.
    In the boom of the early years of his administration, President Clinton only reaped what meager good President Reagan did in this respect. (Despite all the credit President Clinton’s administration tried to take for it!!) Just imagine what would happen if all of Washington (and the statehouses) got it, and got all of it, instead of just a select few . . . Kind of awesome, isn’t it?

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  6. Phyllis Hoff Avatar
    Phyllis Hoff

    Chris:
    Your informal economic talk last night outside the meeting room was amazing, informative and enlightening.
    It would be great if you posted that.
    God Bless and Thanks for all you do for us.

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  7. John Dickinson Avatar
    John Dickinson

    Chris,
    It’s interesting to note that it seems like governments act like we need them when it is the other way around.
    You can have a society without a government, but you cannot have a government without a society to support it.
    Why is government intervention in society called “managed economy”, but societal intervention in government is called “revolution”?
    Thanks,
    John

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