Like the sun coming up in the morning, Central State planning and expansion
predictably leads to state spending exceeding the rate of the real growth of
the state's economy. The US Central State has been no exception and has been
relentlessly expanding faster than GDP since the 1950s with only two notable
exceptions. The dot.com
bubble in the late 90's and the housing bubble in the early to mid 2000s.
These artificial bubbles were created by Monetary Malpractice aimed at
creating desperately needed growth to support excessive spending and debt
levels.
What historically kills the expansionist state beast, is when debt
reaches the critical point of debt saturation. This is the point where
government borrowing is so pervasive that it forces total debt to grow to
enable it to leverage ever smaller growth levels of an economy captured by a
debt stranglehold brought on by the expansionist central state. The
structural imbalance of state expenditures and revenue leads to structural
deficits. This is the situation the US presently finds itself in, and is to
be fully expected, when the central state is allowed to assume a larger
expansionist role. Like a cancer it will insidiously and relentlessly expand
unless operated on. The sooner the operation the better the chance of
survival.
Unfortunately, we are in denial, as the cancer grows and the quack
doctors suggest more spending. Similar to 'blood letting' by medieval
doctors, the diagnosis is flawed and will only accelerate the demise of the
naive and dependent patient.
The Obsolete Concept of 'Central State'
The whole notion of a central state is now obsolete. Technology now
makes this possible and growing social unrest and a Crisis of Trust will soon
demand it. We can fully expect those with political power and its need for
control to restrict this change in every manner possible. The lifecycle of
the expansionist central state is coming to a close for many natural reason. Some of these phenomenon include:
- The notion of the NODE versus HUB,
- The notion of HIERARCHICAL versus RELATIONAL,
- The notion of TOP DOWN versus BOTTOM UP Revenue
distribution,
- The notion of SECURITY versus RISK
Security versus Innovative Risk Taking
What is often forgotten is that within a capitalist system and a free
society, there is a balance of risk versus security. Risk cannot be
eliminated; it can only be suppressed or transferred to others. If you want
growth, you must reward risk and innovation and foster a culture that accepts
failure and low-intensity disorder as the norm. The public cannot expect the
false state promises of security without fully recognizing that it will kill
risk taking, innovation and growth and foster the crony capitalism feeding
off the less risky public trough. Expansionist central states ALWAYS make
promises it has no ability to deliver on without effectively 'killing the
golden goose'.
It must never be forgotten, that government by its nature is
parasitic. It creates no wealth and lives off the wealth creation of others
through its authoritarian powers to legally confiscate and seize. This is a
fact, no matter how well intentions the public perceives the governments
intentions to be.
"Many people want the government to protect the consumer. A much
more urgent problem is to protect the consumer from the government".
Nobel Laureate in Economics, Milton Friedman