Economic Judgment Day

Posted on July 28, 2017 by Robert Ringer


Talk about economic judgment day that intensified during Obama’s eight years of trying to collapse the U.S. economy is starting to surface once again.  The failure to completely repeal the People Control Act (misleadingly labeled the Affordable Care Act by the Dirty Dems) once again underscored the reality that a significant number of Republicans are, at heart, big-spending liberals.  (That does not change the fact that they are also corrupt cowards, but that’s another story for another day.)

Of course, the financial newsletter writers have been predicting a total collapse of the U.S. economy for decades, and they’ve made a ton of money in the process.  But what, exactly, would have to happen to cause the U.S. economy to disintegrate?

One path to economic judgment day is for the government to simply allow market forces to prevail, which, because of decades of government meddling in the economy, would likely bring about a full-scale deflationary depression.  Though the let-the-good-times-roll crowd doesn’t want to hear about it, the truth is that a deflationary economic depression would actually be a good thing for America long term, because it would cleanse the economy of artificially high wages, profligate spending, and malinvestment.

In a deflationary scenario, most people, to be sure, would be much worse off, but a small percentage of folks would actually come out ahead.  That’s because a deflationary depression is a time when, in effect, property is returned to its rightful owners.

The second possibility for the arrival of economic judgment day is runaway inflation, which I have been predicting for more than thirty years.  This would almost certainly lead to social chaos and anarchy, more likely than not followed by an authoritarian central government.  The reason runaway inflation tends to result in authoritarianism is because the natives become restless when they discover that government’s paper money is worthless.

However, I must admit that I sometimes feel like Wile E. Coyote on this subject, because every time I believe the government is trapped by economic reality, I once again hear that infamous “Beep! Beep!” in my brain.

With its high-speed printing presses, its ability to borrow virtually unlimited sums of money, and a monopoly on the use of force (which gives it the power to take money from citizens at will), government always seems to escape the consequences of its actions and lives to see another day.  But unless someone figures out how to make gold out of paper money real soon, the ugly ending to this fairy tale has already been written in stone.

Though it’s anathema to socialists, the truth is that it’s American entrepreneurs who have held up the U.S. economy all these years by doing what they do best:  create wealth.  It is they, not government, who create jobs and increase living standards.

But if Demopublicans in Washington continue to press the welfare pedal to the floor (e.g., as we have seen watching the healthcare chaos, not only is the Republican wing of the party committed to not cutting Medicaid, most of its members actually want to increase it), an inflationary ending is virtually assured.

If that occurs, it will not be pretty, because the continued onslaught of valueless paper money disrupts the market and causes confusion, apprehension, and, eventually, panic.  People are afraid to enter into long‑term contracts, because they have no idea what money will be worth in the future.

Businessmen decrease investments in new plants and equipment, because they do not know if their real profits will be worth the risk.  The latter causes shortages, which leads to even higher prices.

If inflation is not eventually curtailed, a final collapse of the economy begins when people start to guess at what future prices will be.  This sets off a chain reaction in which sellers increase prices even faster than the increase in the money supply.

At that point, government faces its last chance to avoid a total collapse of the economy.  The late, great economist Henry Hazlitt put it succinctly when he said, “Every inflation must eventually be ended by government or it must ‘self‑destruct.’”  This self‑destruction is exactly what has happened in nation after nation throughout history.

The case most of us are familiar with is Germany’s runaway inflation in 1923.  Consider these figures:  Between 1914 and 1923, the German government issued an additional 92.8 quintillion (92,800,000,000,000,000,000) paper marks, a 245 billionfold increase in the money supply.  Prices, in turn, rose 1.38 trillionfold.  Interest rates rose as high as 10,000 percent per annum on some debt instruments.

As you would guess, people eventually refused to accept paper money in exchange for goods and services.  The economy collapsed and chaos and crime ensued.  And waiting in the wings, preparing hysterical answers for hysterical people, was Adolf Hitler, who understood all too well that only an authoritarian police state could restore order.

I guess a rational person would have his South Pacific island picked out by now and be getting his papers in order in anticipation of having to depart on short notice.  But for determined optimists, there is another alternative:  Stay put, dig in your heels, and do your part to help spread the truth — about inflation, about entitlements, about the corrupt and avaricious nature of government, and about the sanctity of liberty.

In other words, do what you can to explain to others why it’s in everyone’s best interest to give liberty a higher priority that all other objectives, as well as what needs to be done to restore the United States to a nation guided by our original Constitution.

One note of caution:  Don’t think in terms of overnight victory.  It won’t happen.  In fact, this is a war where there’s no such thing as total victory.  The story of the human race is told in the ebb and flow of liberty and tyranny, which is why the fight for freedom is never ending.

Just as communists are idealistic dreamers to believe they can change human nature and convince people to willingly give up their freedom and their property, so, too, is it a mistake for defenders of liberty to believe they can convince those who worship at the altar of big government to embrace freedom and self-sufficiency.

It’s entirely possible that Trump, if he can develop the sanity to stop alienating those who tenaciously support him, can pull some rabbits out of the hat and delay the inevitable for a long period of time.  But just know that even if economic judgment day is a bit late in arriving, it is on the way.  The reality is that $200 trillion+ in debt (including entitlement commitments) can never be paid off.  Guaranteed.

That said, you have only two choices:  fight or flight.  I’ve already made my choice.  What about you?

Robert Ringer

Robert Ringer is an American icon whose unique insights into life have helped millions of readers worldwide. He is also the author of two New York Times #1 bestselling books, both of which have been listed by The New York Times among the 15 best-selling motivational books of all time.