Purile collectivist nonsense from a crank.

What the writer describes is a hand-out to every person regardless of their personal circumstances and actions. He wishes to give money- from where, who pays, whose wealth is debased by the massive tidal wave of inflation he sets loose upon all? He wishes to reward those who borrowed without serious thought of repayment, those who played the system by dishonest statement, those who consumed without thought for the future, those who failed to save, those who ate to the point of morbid obesity, those who consumed various deleterious substances to the point that they no longer possessed wealth (let alone the ability to acquire it or even to apply reason in a rational manner), those who failed to plan ahead, those who didn’t work, those who took dishonest shortcuts (took the easy way), those who failed to avail themselves of the opportunity to upskill or study or take on greater responsibility. To the self-indulgent, the slothful, the greedy, the liar, the con-man, the cheat etc. he would give free bail-out money regardless. After all, in his view they should all should receive something for nothing.

He wants to institute a something for nothing scam and has the utter lack of integrity to call such a rort “justice.”

That such a crank twists economics into such a gordian knot of confusions and self-deceptions is bad enough. That he commits the same atrocity to the principle of justice is criminal.

Sione

I think a collapse may be what we need. A correction of sorts. The same way a short but painful correction in the economy is the best medicine.

My understanding of a 100% reserve requirement is exactly as you say. Banks would only be able to lend depositor’s money expressly deposited for that purpose with matching maturities or covered by the banks capital.

However, I would only ban FRL in the government’s money supply. I would allow it in private money supplies if for no other reason than to prove that a true free market in private money creation would eventually crush it.

we don’t need a requirement, simply lock up all the banksters and start over with some honesty.

Until your own job is directly or indirectly eliminated? Much of the socialism in the US is a reaction to the banker fascism we’ve had since 1913. How big was the government in 1929 when the bankers wrecked the economy?

Another “spread the wealth” squeme Daniel

Yes, it would spread the wealth (in real terms too). Our problem is unjust wealth concentration as a result of the government backed counterfeiting cartel. Restitution is just and is Biblical too. Where are the Austrians on this? The silence is deafening.

would just expand government in a direction

There would be no expansion of government. Where do you get that from? Did not Bush send “stimulus” checks to the American population? How did that grow government?

which could utterly nullify any “fundamental reforms”

Untrue as I indicate above but even accepting your premise, you don’t have much faith in the free market, do you? Fundamental reform would lead to general prosperity which would shrink the need for government.

But getting back to justice, a bailout of the population is justified. And whether you or the Austrians think it will do the economy any good is irrelevant. Or is justice irrelevant to the Austrians?

Another “spread the wealth” squeme would just expand government in a direction which could utterly nullify any “fundamental reforms”

Another “spread the wealth” squeme would just expand government in a direction which could utterly nullify any “fundamental reforms”

So even forgetting justice for a moment, would not a one-time bailout of the population be a very pragmatic way to avoid a severe Depression and possibly WW III?

No

And if it is followed by fundamental reform, then who cares if the “malinvestments” are not purged since a true free market would deal with them anyway?

Again, no

Going “cold turkey” is the best way out. A fundamental reform would help it be more moderate, like the 1920 Depression rather than the double-dip Great Depression

Let’s hope they make a rap video on George Reisman’s version.

Aren’t we seeing how “successful” amoral economics is?

But more to the point. The author mentions Illusionary wealth. Is a McMansion an illusion? Or is it a property that would be perfectly sustainable if only the owner had not lost his job because of the bust? And isn’t the bust almost 100% a monetary problem (excessive debt caused by FRL) that could be solved with fiat money? And would not a bailout of the entire population provide that fiat money?

So even forgetting justice for a moment, would not a one-time bailout of the population be a very pragmatic way to avoid a severe Depression and possibly WW III? And if it is followed by fundamental reform, then who cares if the “malinvestments” are not purged since a true free market would deal with them anyway?

Conventional wisdom states, those who survive the bust must have had the best business ideas. In realty, they are the best capitalized or because of their size have access to additional capital.

The companies that have great ideas but are under capitalized tend to make incredibly risky decisions during the boom period (gaining mkt share vs. slow sound growth). On top of that, boom time investor psychology (professional or otherwise) is to make a quick profit. Thus, when the bust comes investors bail. The company with the great idea goes bankrupt and the idea dies with it.

The best example of that, in my personal experience, is Webvan- the online grocery store/delivery service of the late Internet boom/bust period. The most arcane activity people do in America is go to the grocery store. There is no reason to go and look at mass produced items that we eat. Most of the Webvan investors I know were also customers and when they talk about Webvan, they don’t talk about the money they lost, they talk about the excellent service they lost.

So, one of the great causalities (among many others) of the boom/bust cycle are good ideas and every time I go grocery shopping I am constantly reminded… that no one is going to invest in another Webvan in my lifetime. I wonder how many other great ideas have been washed away from a boom/bust cycle?

But aren’t you Austrians missing a little item called justice and restitution?

What are the moral implications of a government backed fractional reserve banking cartel using the government enforced monopoly money supply?

Are they not that:

1. Savers are cheated of honest interest rates
and
2. borrowers are driven into non-servicable debt by the dilemma that if they don’t borrow from the counterfeiting cartel themselves that someone else might and thereby price them out of the market forever?

In truth, the entire population is a victim of the FR bankers, not just the savers.

Here’s a remedy to fix them all:

1) Slap a 100% reserve requirement on the banks to put them out of the counterfeiting business.
2) Send a huge check of new, debt and interest free legal tender fiat, United States Notes, to every American family which in total should equal M1.

So, no deflation, no plausible price inflation, no hangover, no more counterfeiting and just compensation for the theft that has already occurred.

And after the debt has been cleared in the system, then fundamental liberty in private money creation should be allowed.

Look at all of nature. There are likely more parasites in the world than other species. I recently read that some 5% of our body weight is made of bacteria living on and inside us. The parisites that survive the longest don’t kill their hosts. But life is certainly not efficient, nor is it fair. Nature could care less if we suffer or not. Some parasites invade our brains and provide chemicals that attach to our dopamine receptors – to push us in directions they wish.

In nature, extinction is common. Everything lives and dies. One day there will be a revolution and the American form of government will become extinct. What will replace it is unknown. Will it be better? Unknown. If you’re looking for a grand purpose then you need to look to religion. Economics is closer to biology and evolution than religion. And politics is merely parasites at the level of society.

However, just as bacteria have evolved geometrically to become resistant to anti-microbials, there is an evolution afoot in the bio-genomic field – moving at geometric speed. Man is on the verge of creating a new layer on top of the layers that exist. We can now reprogram ourselves. Where that will lead is unknown. But it has the potential to make a new species of man that can survive without a parasitical control layer – government. Brave new world? Maybe. But it gives me hope that we can change things. Maybe it will happen when humans move off the planet. What I don’t expect is that it will happen in my lifetime, however. So, I think the near future will simply be more of the same. War, poverty, misery, with a few at the top living like kings. That’s as optimistic as I can get, sorry.