Today’s macroeconomic beliefs defy all the historical evidence with their focus on increasing the economic presence of the state at the expense of the productive private sector.
It is often claimed that inflation reduces the true burden of debt. This is true for existing debt, but those who advocate it as a remedy for government indebtedness fail to understand that it also increases the cost of the government’s future debt.
It is possible to conceive of a world where fractional reserve banking is understood by both banker and depositor and involves no deception or fraud. But in that world, deposits cease to be money and become complex credit securities.
Contrary to what many modern economists say, increased saving is not a problem for the economy. The real problem stems from declines in production and saving, and these often result from central banks' monetary policy.
The current bust has been made worse by previous periods of easy money, which destroyed the wealth creation that is critical to sustaining a growing economy.
