Economic Cannibalism: A Lesson From the Soviets
Simon Black's June 14th article entitled "What are the Social Implications of Economic Collapse?" makes a clear-cut diagnosis of America's imminent fall from its economic pedestal. The point of no return is passed according to Black. Foreign buyers of Treasury securities are undoubtedly nervous over the credibility of U.S. debt, and as we lose their business the only option for Washington is to turn up the printing press at the Federal Reserve. Deficit spending has evolved into an all-out race to the bottom of the dollar. The diagnosis is in. Massive inflation and an attempt to continue government austerity via higher taxation will erode much of America's purchasing power along with her savings. The final result will be what Black and many others have termed economic cannibalism. On this, Black makes a poignant reference that bears the full light of Ayn Rand's vision as laid out in Atlas Shrugged.
In the best traditions of Atlas Shrugged, the government will continue its persecution of the productive class– professionals, investors, entrepreneurs, and skilled workers. Existing taxes will rise, new taxes will be created, trade barriers will be enacted, and a maze of cost prohibitive regulations will be passed.In the private sector, the results will be stifled incentive, which translate into a serious lack of innovation and growth. The public however will see still worse effects:
When inflation eats away at a family’s already meager standard of living, when austerity eliminates the benefits to which recipients have grown accustomed, when default vanquishes a retiree’s savings, when high taxes make workers feel like they’re just government serfs– this is when the real turmoil will begin.Why do we continue down a path to ruin when it is so clearly lit by the beacon of bankruptcy? One may be so bold as to draw a useful comparison between the fiscal inadequacies of the U.S. over the past two decades with that of the Soviets. In 1982, President Reagan in a June 8th address to the English House of Commons, said with a wagging finger, "the Soviet system pours its best resources into the making of instruments of destruction. The constant shrinkage of economic growth combined with the growth of military production is putting a heavy strain on the Soviet people. What we see here is a political structure that no longer corresponds to its economic base, a society where productive forces are hampered by political ones" (my emphasis). One may argue then, that the U.S. system of government no longer "corresponds" to the economic realities that dictate pragmatic policy. Our political structure instead ignores the logical implications of its policies in favor of safeguarding political interests, thus rendering such policies and the political structure itself highly illogical and contrary to our best interests. Continued on the next page