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2 thoughts on “Disaster Ahead, Says Reagan’s Budget Director

  1. I'm not hopeful either. I see the writing on the wall and know that this deck of cards that we live in is going to come crashing down very, very soon. It's going to be one big tornado nation wide!

  2. Treetorn says:

    Raising taxes, (as part of his solution) is not the answer. If anything taxes along with most regulations need to be abolished.

    Taxes, regulations, and government bureaucracies are like a vacuum, sucking up all of the money and crushing innovation and creativity. Government only offers stagnation, inefficiently, and the status quo.

    Without the debasing of currency, no government can exist in its current form, nor will they after the great correction. WHy? Because of diminishing returns. Without innovation and creativity, there is no way to overcome diminishing returns. In time every good and service needs to be revamped and government cannot do this.

    What the country needs is a laissez faire economy with government role being to secure indivudal property rights. What is needed is the recognition of a convent between each individual and God and as such each person is sovereign with government being the trustee of rights and not granter.

    Over time their will probably be some mixture of default and money creation because it is easier to inflate. But as long as most of the newly created money sits in the bank reserves, ready to be lent, everyone suffers.

    Of course when this money is lent out they suffer to and thats when the real crises occurs. But, who is to say that banks will be able to lend a fractional reserve? Who is to say that they must keep 200%+ reserves. We just don't know what is going to happen but anything is plausable.

    But the Federal Government needs the money supply to expand in order for there to be money to buy things like treasuries. Otherwise the fed just prints it. WIthout loans there is no grow and thus the Fed Gov is doomed because of economics in the long run. Currently people who sell gold in order to pay for things will have to pay taxes. So, there will not be a mad rush to Gold Yet, unless oil and other resources become priced in Gold, but this will also destroy other nations government. Current government cannot exist without debasing their currency too. So, they will fight to the end. BUt they are doomed too, unless the american consumer starts innovating and borrowing money.

    However, since the debt is so large, there will have to be default of some type, whether be from inflation or from not paying the bills. Ether way, those that depend on government and on fixed incomes from are the ones who are going to suffer the most.

    But, as governments are reduced because of economics the suffering can find relieve, except for government entities.
    Government in the long run is doomed, one way or the other. On the other hand, people are not.