Every nation has to respect the laws of economics or they will end up paying the price for their ignorance.
The laws of economics are as simple to understand as 'what goes up must come down', yet our government leaders continue to think that they can defy gravity.
Here are the basics Laws of Economics;
- The borrower is slave to the lender
- Real wages will only increase with an increase in productivity
- Private property is the most effective way to motivate an increase in productivity
- Wealth is created with savings and production
This is why the trillions in government bailouts and stimulus packages has not been able to improve the economy.
The laws of economics have already been broken years ago and the result is that the economy needs to rebalance.
Creeping socialism has transformed America into a culture of over consumption with a bloated government that is standing in the way of ever returning to a sound economic recovery.
Government's don't produce anything and therefore have no money that they haven't taken from the productivity of the people. Governments can only stimulate one sector of the economy by depressing other sectors, since they must tax, borrow or inflate the money supply to finance the spending.
There is no way to quickly undue this mess we have without a long process of re-educating the public to realize that it was pure capitalism that brought America into prosperity and capitalism is the only road back to prosperity.
Repeating Mistakes of the Great Depression
The U.S. economy is in big trouble and the governments' attempt to stimulate the economy has only broken the laws of economics even more, by causing more money to be misallocated. President Hoover, followed by Roosevelt made the same mistakes and turned the recession of 1929 into a decade long depression.
They didn't want to face a recession, even if that is what that laws of economics were demanding. They tried again and again to use government intervention to avoid the recession - to no avail.
Perhaps one of the best explanations of what happen can be found in Thomas J. Dilorenzo book, "How Capitalism Saved America".
How Capitalism Saved America: The untold history of our country
"How Capitalism Saved America"