In the previous installments of this series (part I, part II), I have argued that government default is not only ethical, it is also beneficial to the economy and society as a whole. The one question I left open at the end of part II was the possible consequences for financial markets and the monetary system in the case of a government default.
Several months ago, I debated Thaddeus Russell on The Tom Woods Show. The proposition debated was “Postmodern philosophy is compatible with a politics of individual liberty.” Thaddeus defended the proposition and I opposed it. Here, I want to flesh out some of the points I made in the debate, adding more context than I could marshal under the constraints of the format. For better or worse, this requires a somewhat deep dive into postmodern ideas.
After discussing the nature of the Fed’s annual audit in my previous article, I will now share the highlights of the 2020 audited financial statements. Starting with one, if not the largest, balance sheets on the planet:
The notion of “Auditing the Fed’’ has been around for awhile. Technically, the Federal Reserve is audited. On Tuesday, with little to no fanfare nor media coverage, there was a press release announcing the completion of the 2020 Audited Financial Statements. Digging deeper, each of the 12 Reserve Banks received their own independent audit.
Bureaucracies always benefit from political hysterias. A big one today is that police forces are being infiltrated by white supremacists. Pursuing this bogeyman will fill bureaucratic coffers, while public security services get worse and more expensive.
It’s a cliche now that big government never lets a crisis go to waste, but the same dynamic often holds at the bureaucratic level with regard to public manias. These crises and manias are not uncommonly caused by the very institutions claiming to be the only ones capable of solving the matter.
Listen to the Audio Mises Wire version of this article.
Listen to the Audio Mises Wire version of this article.
If there is anything Wall Street banks crave is relief. Primarily relief from the potential for failure and, next, relief from holding much, if any, equity capital. These banks like their capital tiny and their profits huge. Losses should be socialized. After all, we want the ATMs to keep spitting out cash.
