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Money and BanksMoney and Banking
Real GDP does not measure the real strength of an economy, but reflects monetary turnover. Thus, the more money is pumped, the stronger the economy appears to be.
When corporations can make more money by angling for government favors than they can by serving customers, that is exactly what they are going to do.
Price-control schemes have been failing for thousands of years. Now it looks like politicians in Washington are going to give price controls yet another try.
Would it be possible for the boom-bust cycle to emerge in the free market economy where the central bank does not exist and where gold is money?
Loose monetary policy can appear to work so long as real wealth is expanding. But money expansion weakens wealth creation over time, eventually leading to slower growth, lost wealth, and economic busts.
The introduction of money does not alter the fact that individuals still have to produce something useful in order to secure some other useful goods for themselves.
Bureaucracy and Regulation
Occupational licensing may increase quality for some higher income customers. But licensing increases monopoly power for dominant firms while driving lower-income customers out of the marketplace.
Given the way it's calculated, GDP can be driven up just as much by squandering wealth, as by building it up.