In college I had a latent interest in economics. However, my professors with their mathematical and Keynsian mumbo-jumbo turned me off. Then I started to read Ayn Rand. Then Harry Browne. Then Hayek. And, finally, Ludwig von Mises. At last I had found not only a teacher and theorist who believed that the logic of his economic arguments lead to inexorable truth, but also a philosopher who demonstrated convincingly why this must be so.
As I read more and studied more I was fascinated by the difference between economic truth as Mises unveiled it and the economics understood and practiced by main stream academia and politicians. I approached this difference as an intellectual curiosity. All of Mises' theory (Austrian Economic Theory) predicted the certain outcome of the fiscal and monetary policies employed by the government of the United States: inflation and, eventually, monetary collapse.
That was in the 70's and 80's. Today what is happening to the lifeblood of our economy -- money -- is no longer an intellectual curiosity. Today we are staring life and death in the eye, literally.
I think many in Washington and academia believe, either because of their Keynsian training or massive egos, that the US monetary system is absolutely controllable and indestructible. Federal spending, public debt, Federal Reserve money-printing, zero interest rates...none of these policies, so those in charge believe, will have any detrimental effect on our fiat money system, on our business habits, on our individual, economic decisions.
How foolish! What was understood a hundred years ago, not by economists, but by men of sound, common sense is today scoffed at and discarded. Today's ignorant and arrogant authorities, enabled by an ignorant and amoral public, are destroying the American way of life: private property and individual freedom. They are doing it by destroying our means of surviving in this society: our money.
Without a sound and trusted money individuals have no choice but to revert to barter and a self-sufficient, hand-to-mouth existence. Money is the key to maintaining the complex system of the division of labor that has been hundred of years in the making and has brought prosperity to millions over the years and today. When money is destroyed, that system of the division of labor cannot be sustained. When money is destroyed, individuals who depended on a store of money for their very survival are left helpless. The old and infirm are the first victims. They are threatened by hunger and loss of shelter. They will eventually be reduced to begging...or they will die.
When the system of the division of labor can no longer support government largesse, the next victims are those who depend on government handouts for their survival. Being ignorant, they cannot understand why government is no longer able to provide for their needs. Those responsible in government, who turn to "austerity" policies in an attempt to keep their wealth redistribution schemes viable, are called greedy, uncaring and unfeeling. Those losing their government stipends and subsidies take to the streets.
There is no good that comes from the destruction of money. Progress is halted. Indeed, our standard of living reverts to levels of hundreds of years ago. In our modern society, the destruction of money results in panic, conflict, riots, destruction and death.
There is still time to turn things around, but I seriously doubt there is the will to do what must be done.
UPDATE: This article by Ralph Benko, entitled "Fiat Money: The Root Cause of Our Financial Disaster," is an apt study guide for those who doubt the power of a "sound and trusted money" to secure property, freedom and prosperity.
There is ample evidence that restoring gold convertibility would put the world back on the path to jobs, growth, and a balanced federal budget. Politicians do not like messing around with monetary policy. But gold, recently rediscovered by the tea party, has an impressive technical, economic, and political pedigree of gold convertibility and a very well established track record of job creation, properly applied, during many eras.Our Washington ruling elite has no taste for restoring sound money. The windfall it reaps from debauching money is too precious to our ruling powerbrokers. Fiat money manipulation is the very source of their power and wealth. Restoring sound money will have to be accomplished by individuals, the states and upstart political thinkers like members of the Tea Party.