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The Laws of Economics Are Like Gravity, They Cannot Be Avoided

By: Steve Johnson

11/3/2009 - 20 Comments

The basics laws of economics are part of the fabric of every form a money throughout the world.

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"



Contrary to the current political leadership, the best policy for the fastest economic recovery is the reduce government intervention, which is primarily responsible for distorting the markets in the first place, and let the free market take over to adjust for the previous policy mistakes as quickly as possible.

History has shown that the right thing to do is often very difficult for elected officials to do, unless they have a genuine interest in the long term prosperity of the economy, in which many decisions they need to make will not result in a benefit until after their term of office. 

President Obama has been quick to take created for 650,000 jobs (according to his numbers) saved or created by his stimulus package.  This is a clear indication that he wants credit for his policy actions.  Without the government intervention, the free market would have created 6 million jobs by now but no one would have been able to take credit for it. 

History has proven again and again that the laws of economics cannot be avoided and the recession that would have been over by now is just getting started.

Time is not on our side. The sooner we turn from socialism the better – no matter what the terms are, we will never find prosperity in expanding the government and printing money to pay for it.

The government cannot product an economic recovery, here are 5 Ways to Turn Around the Economy.

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How Capitalism Saved America

This book is an excellent presentation on the problems of government 'regulations' into free market mechanisms. This book illustrates simply and clearly how many chaotic economic problems were caused by interference from government regulations and how capitalism has overcome them. Master this book and you have overcome most of the bad economic thinking of our time. Government is the cause of capitalism failure.

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

In discussions of today's economic meltdown and what to do about it, the Federal Reserve is a stealth helicopter: it never shows up on the radar. With the exception of a few esoteric specialists and those Ron Paul Revolutionaries who burst into chants of "Abolish the Fed!" Historian Thomas Woods notes in this important book, the Federal Reserve bears a large part of the blame for the mess we're in. In the first part of "Meltdown," Woods shows how both in theory and in practice, Fed policy fueled an artificial boom and is now leading us to a much larger meltdown.

U.S. Manufacturing: The Engine for Growth in a Global Economy

This volume provides a comprehensive analysis of the essential role of the manufacturing sector of the US economy. The increase in the relative importance of the service sector and the globalization of manufacturing has tended to dull the image of US manufacturing....This volume contains much useful data that has been condensed into tables and charts to provide support to the reader without interrupting the flow of the text.

The Coming Economic Earth Quake

Larry Burkett explains how the financial troubles in America started back in the 1930s. Larry explains the economics of huge goverment and public deficits and how it leads to hyper-inflation. We may be headed for another great depression.