by James Craig Green
As you can see from my favorite website links here, Russell Randall is one of my favorite economists, joining my friends and DEMAND WIZARDS Paul Prentice and Penn Pfiffner on this blog as another Colorado economist who has dedicated his career to the study of markets, economics and liberty.
Russell Randall is the creator of AUSTRIAN ENGINOMICS, whose website begins with a video entitled, What is the Real Tax? It is the first thing you will see when entering it. It is one of several educational programs by Russell, which will better prepare you for the main subject of this blog post (economic collapse).
In his short video presentation What is the Real Tax? Russell makes the point that even if all present taxes were repealed, but government spending continued, other, currently-hidden taxation woud occur from government's commanding labor and resources to the government's purpose, which adversely impacts the economy right now, not just in the future. This is completely consistent with Federal Revenue Chart 5 in my June blog post, HERITAGE on GOVERNMENT SPENDING and REVENUE, which showed that even when the maximum income tax, for example, was higher than 90 percent, tax revenue remained between about 15 and 20 percent of GDP, averaging 18 percent. The remaining government spending, whether funded by public debt or monetary inflation, still causes a current reduction in the economy due to the commanding of labor and resources away from more productive purposes. As I stated in June's CONTRASTING GOVERNMENT AND MARKET INCENTIVES, limited government resources considered to be essential (courts, police, national defense) would be seen as a direct cost, and not a boost to the economy. All government is a drag on society, the polar opposite of markets, which are the true cornucopia of wealth.
THE CURRENT DEBT LIMIT DEBATE
Quoting Russell's email message to me today, A debt ceiling increase with a token gesture towards closing the budget deficit only kicks the can down the road by a year or two. We are not addressing the ROOT CAUSE!
Russell's approach here is focused on understanding the confluence of several historically-significant asset bubbles. He says: The root cause of the extraordinary trade and budget deficits, and financial asset bubbles and imbalances we suffer today has everything to do with with an unsound monetary system. When President Nixon terminated any semblance of a currency tie to gold in 1971 it scripted a financial collapse one or two generations later. Never in recorded history has a fiat money system stood the test of time beyond a few decades.
Russell explains that The serial bubble blowing exercises have nearly run their course. The final and most dangerous bubble to pop is the bond market. In his email message, he introduces this link to his new four-page article about the inevitability of an unprecedented economic collapse:
RUSSELL RANDALL'S ARTICLE on ECONOMIC COLLAPSE
Further describing the possible popularity of his article, Russell's email asks: Is it possible for the principle of sound money (i.e. not fiat) to become popularly demanded in an advanced democracy where the opposition includes the elite bankers who control fiat money and credit, and their puppet pollsters who test and control the politician sound bites? ...Or, do we have a critical mass of freedom lovers who can articulate a vision of a return to the principles of liberty?
If you like the article or Russell's website, I hope you will give them wide distribution to kindred spirits and others who may consider his arguments and projections.
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