A PROFOUNDER CATASTROPHE
Has there ever been a country that improved its economic health by monetizing its debt? As far as I can tell any country that regularly created money to pay its bills suffered greatly from inflation and economic deterioration. Any country that has done what the U.S. is doing now, not only wrecked the value of its currency, it brought hardship to its citizenry. These periodic episodes of raw inflating are among the worst thing a country can do to itself. Apparently the lessons of history don’t count with our monetary authorities.
Another question is whether increasing taxes has ever caused an economy to improve? Have tax increases ever added to the prosperity of a country? I can’t find an example in the history of the world where higher taxes improved the lot of the people. In fact, it appears to be just the opposite. The greater the tax burden the less economic progress.
When a company makes a profit they hire more people. When government takes a big share of those profits it means less expansion for the company and fewer new hires. By taking a company’s profits under the guise of creating jobs the government kills jobs. As the great Austrian economist Ludwig von Mises wrote, “Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other.”
The final question is whether a combination of high taxes and persistent money creation have ever made a country more prosperous? The answer is never. They have only made countries poorer. They have caused social unrest, injustice and poverty. These practices have only torn countries apart. They are in the process of doing the same thing to America. Of taxes Mises said, “Confiscatory taxation results in declining progress and. . .brings about a general trend towards stagnation. . .” Of inflation he said, “Only apparent and temporary relief can be won by tricks of banking and currency. In the long run they must land the nation in a profounder catastrophe.”