spending. Because of this, looking at the data alone, without a proper theory of economics, can produce a highly misleading picture. For a year, the government have actually created an illusion. While everyone is celebrating the unexpected economic recovery, which is also unexpectedly robust, it serves us to look beneath pay in a free market. To that extent, they harm the prospects for economicgrowth. If anyone says otherwise, he is ignoring hundreds of years of scholarship and
who or what is at fault? Not surprisingly, Democrats have claimed that the economic downturn is entirely the fault of the Bush administration. Hillary Clinton the Fed’s credit expansion is obvious. The accompanying chart demonstrates money growth from 1983 to 2000, and we can see that growth in M2 and M3 was especially
and federally sponsored agency debt outstanding at the end of 2000. In 2001, the growth of GSEs did not abate. The expansion of the GSEs—neither wholly private nor he “may be the most confident CEO in America.” When asked whether any realistic economic scenario scared him, Raines replied, “No. . . . Our expectation is that in
of the World Bank and who adheres to orthodox Keynesian doctrine, the dominant economic paradigm of mainstream political and economic theory for the past 50 years. policies. For instance, between January 1993 and April 1996, the yearly rate of growth in money M1 fluctuated between 120 percent and 500 percent. Austerity measures
discovery. And it’s about innovating. So many critics of capitalism assume that economicgrowth and development are inevitable, that economies are somehow impelled to grow by
integral to the very fabric of the world in which we live. I speak, of course, of economic law. This is not a law someone passes or someone enforces. It predates Credit expansion by a central bank is no substitute. When you see massive economicgrowth being fueled by loose credit, you know that it cannot last. This law applies
bureaucratic rules and by politics. Spending decisions within a bureaucracy are economically arbitrary as well, as Mises explains in his classic 1944 book or the merit of any output. It is all guesswork. Because there is no rational economic calculation taking place, politics rushes in to fill the vacuum. In bureaucracies have powerful incentives to grow, regardless of whether or not such growth actually serves the public. Every bureaucrat is inherently an empire builder,
year from 1991 through 1994. After declining to less than 5 percent for 1995, the growth rate of the money supply shot up to over 15 percent in 1996 and nearly 20 banking system in anywhere near the quantities needed to pay off depositors. In economic reality, a bank’s deposits are claims on its loan and investment portfolio,
in question. To understand these causes, it will help to understand the mainstream economic case for government intervention in the economy. This case provides the intervention is indeed overblown, as we contend that it is, then much of the growth of government to deal with public-goods problems is unnecessary. CFR
of its name, consumer protection regulation consists of one primary negative—the growth of the State. All other negatives fall out from this, and any positive the lethal dangers of said product. All said, our individual liberty is driven by economic freedom. And central to that freedom is the ownership of one’s earned wages
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.