1] I wish people knew this about politics and economics. Economies grow because our wants > resources. Therefore, companies try to produce things efficiently.
And, we consume them because we derive benefits.
2] If most of the things in the world were left as “free markets”, money would automatically flow to most efficient producers. In 2022, governments & citizens alike are bleeding through their nose, paying high taxes, laden with crazy debt and high inflation.
3] Why? it is a validation of the Keynesian economics going wrong. So here is the back story:- Back in the 19th century, Gold was a currency. FIAT money came and improved the speed of transaction and the fractionalisation problem associated with gold.
4] The system worked up until WW-1. Now, War is costly and if we citizens truly understood the true cost of war, no one would go to one.
5] But, this presented an amazing opportunity to devious governments to de-facto institute a system: where FIAT money (or government bonds) would be presented as a great investment opportunity to the general masses. Bonds were swapped for gold, with a promise of returns.
6] The model got tweaked and FIAT (which has infinite supply) replaced gold (which has a finite & a stable supply) at scale eventually.
7] Masses were convinced that 2% inflation is great for you (since it allows the world to grow– but de-facto it simply gives governments more power to print money).
8] The more the government can print, the more useless business it can subsidise (eg. consider Airlines, Power Plants etc in India) all are now being privatised, after ginormous failures. And, after destroying crazy amount of wealth.
9] You would ask: who gave governments so much money to destroy? Simple answer: You and me. Did we give it willingly? the answer is no. We basically gave them a licence to print as much money as they like (we pay it back through increased taxes and inflation).
10] Meanwhile, short sighted politicians go on 4-5 year spending extravaganzas dolling out political favours to people/businesses they like, offering cheap debt. Why? Because they have infinite power to print.
11] The fact remains you can earn 10 Million and put it in your bank account. You will feel safe.But, even that can be burned down to 0 through hyperinflation. Why no one talks about it? because most of the Economics that is taught in schools/universities is Keynesian
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