The View From 1776
Friday, June 04, 2010
Would That It Were So
Monty Pelerin in “The End of Democratic Socialism,” (hat tip to Maggie’s Farm) notes that socialist governments (including the United States) are running out of other people’s money.
Unfortunately what he fails to note is that, possibly for another decade, our socialist government can continue covering deficit spending with deliberate inflation, i.e., debasing the value of the dollar via the Federal Reserve’s continuous creation of fiat dollars out of thin air. That’s what Nixon and Carter did in the 1970s stagflation.
For a time, China will continue to bank us, because we are a big export market for Chinese goods. Meanwhile, the Chinese will continue the process, already in motion, of switching to other reserve currencies. When the dollar becomes almost worthless, the United States will collapse.
Of course, that scenario could be prevented by political resolve in Washington to cut welfare-state deficit spending. But the probability is near zero, because socialistic entitlements corrode the human soul, making people selfish, greedy, and heedless of the general welfare. (See Slaves to Socialism.)
Degeneration in that direction has been going on since Franklin Roosevelt, in his 1930s New Deal, sold us on abandoning the original Bill of Rights and accepting what he called a second bill of rights: socialistic security in the arms of Big Brother. By now, after half a century of socialist religious indoctrination in our colleges and universities, most Americans believe that the socialist welfare state is the only fair variety of government. They aren’t about to give up their government hand-outs or their religious faith in the collectivized political state as humanity’s salvation.