Thursday, June 01, 2006

What is the government doing to our wealth?

One gets richer (i.e., increases one's future supply of capital goods) by saving (i.e., by investment in capital goods) and not by consumption (i.e., by current exhaustion of capital goods).

This is obviously true of men. And it is just as true of nations.

Unfortunately, modern governments established under the care-taker model of democratic nation-states do not have an incentive to pursue long term savings at the expense of short term politically motivated spendings. Witness modern-day Robin Hood policies, a.k.a., coercive extortion at gun point -- subsidies to inefficient producers, reservations on the basis of caste and class, tax-funded handouts in the name of social equality -- transferring wealth from the productive to the non-productive, just about everywhere in the world.

The present dollar is worth some 10 cents of the 1970 dollar and is bound to lose ever more in the future.

Indeed, What has the Government done to our money?

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