Judgment Day

By Robert Ringer

In Part XIV of this series, I mentioned three factors that allow governments to delay what you would expect to be the inevitable consequences of their prior actions: unforeseen factors that can change things, government's ability to print money, and government's monopoly on the use of force. But in the early 1980s, there were two other factors that doomed my prediction of runaway inflation.

The first was the explosion of entrepreneurial technology that made many things much less expensive than they otherwise would have been. The second was the unlikely arrival of the Gipper on his white steed, showcasing his power to motivate the masses. Unbeknownst to the average citizen, Ronald Reagan's actual policies were quite liberal, but the contrary perception was enough to keep intact the most important aspect of false prosperity: belief.

But that was then, and this is now. Today, mainstream pundits are starting to say many of the same things I was saying in the late seventies and early eighties. Unfortunately, the "solutions" the current crop of presidential candidates are offering will only make matters worse. Interestingly, however, the Democrats are more honest than the Republicans. At least they admit that they want to dramatically increase spending, which is certain to hasten the arrival of Judgment Day.

Judgment Day can come about in one of two ways. The first is to let market forces bring about a full-scale deflationary depression. Though the Best Buy and Circuit City crowd doesn't want to hear about it, the truth is that a depression is a good thing, because it cleanses the economy of artificially high wages, profligate spending, and malinvestment.

In a deflationary scenario, most people will be much worse off, to be sure, but a small percentage of folks will actually come out ahead. That's because a deflationary depression is a time when property is returned to its rightful owners.

The second possibility for Judgment Day is runaway inflation, which would lead to social chaos and anarchy, more likely than not followed by a dictatorship. The reason a dictatorship becomes "necessary" is because the natives tend to become restless when they discover that government's paper money is worthless.

Now let's not get carried away here. I could be wrong again ... at least for a while. I sometimes feel like Wile E. Coyote. Every time I think I have the government trapped, I hear that infamous "Beep Beep" and fall on my face. But unless someone figures out how to make gold out of lead real soon, the inevitable is already written in stone. Which brings me back to Mr. Obama.

It is American entrepreneurs who have held up the U.S. economy for all these years by doing what they have always done best: creating wealth. It is they, not the government, who create jobs and increase living standards. But if Obama (or Hillary) presses the welfare pedal all the way to the floor, the consequences will be swift and severe.

With McCain, the fall would be slower, but just as lethal in the end. He's part of the crowd that only talks about slowing the growth of entitlements, not putting an end to them.

Remember, the continued onslaught of valueless money disrupts the market and causes confusion, apprehension, and, eventually, panic. People are afraid to enter into long term agreements, because they have no idea what money will be worth in the future.

Businessmen decrease investments in new plants and equipment, because they do not know if their real profits will be worth the risk. The latter causes shortages, which leads to even higher prices.

If inflation is not eventually curtailed, a final collapse of the economy begins when people start to guess at what future prices will be. This sets off a chain reaction where sellers increase prices even faster than the supply of money increases; i.e., panic eventually pushes prices up faster than government's inflation of the currency.

At that point, government faces its last chance to avoid a total collapse of the economy. Again, Henry Hazlitt put it well when he said, "Every inflation must eventually be ended by government or it must 'self destruct.'" This self destruction is exactly what has happened to nation after nation throughout history. The one most of us are most familiar with is Germany's runaway inflation in 1923.

If you doubt the ultimate results of a policy of continued inflation of a country's currency, consider these figures: Between 1914 and 1923, the German government issued an additional 92.8 quintillion (92,800,000,000,000,000,000) paper marks, a 245 billionfold increase in the money supply. Prices, in turn, rose 1.38 trillionfold. Interest rates rose as high as 10,000 percent per annum on some debt instruments.

As you would guess, people eventually refused to accept paper money in exchange for goods and services. The economy collapsed and chaos and crime ensued. And waiting in the wings, preparing hysterical answers for hysterical people, was a man — Adolf Hitler — who understood all too well that only an authoritarian police state could restore order.

More than fifty years ago, a little Jewish gal from Russia tried in vain to tell us what would happen if Atlas decided to shrug one day. Unfortunately, most people just waved aside Ayn Rand as a kook.

Well, given that I, too, am of Russian heritage, allow me to offer my most current advice: If you have an incurable compulsion to vote in the general election, I suggest you cast your ballot for Obama (or Hillary, if she finds a way to eliminate — er, make that overtake — Obama).

Why do I say this? Because if McCain ends up on the throne, no matter how liberal he may be, the Democrats and their left-wing allies in the media will have a cakewalk blaming the inevitable economic collapse on the evils of capitalism and abstracts like hard-core "greed."

So, best you have your South Pacific island picked out and get your papers in order, because there's a good chance you'll have to depart on short notice. The prosecution of businesspeople and entrepreneurs will be so zealous, it will make Eliot Spitzer's heyday (prosecuting businessmen, that is) look like a church festival.

Of course, there is another alternative. That's to stay put, dig in your heels, and do your part to spread the truth — about inflation, about the sanctity of liberty, about the true motivation of politicians. In other words, do what you can do to educate others about what liberty is all about and what needs to be done to return the United States to a nation based on our original Constitution.

Don't think in terms of overnight victory. It won't happen. In fact, as with Cho Factor solutions, there is no such thing as total victory. The story of the human race is told in the ebb and flow of liberty and tyranny.

Just as communists are wrong to believe they can change human nature and "convince" people to willingly give up their freedom and property, so, too, is it a mistake for defenders of liberty to believe they can convince those who worship Big Government to believe in freedom.

Or perhaps a simpler solution to this mess would be for all of us to just cast write-in votes for Billy Mays, the television turkey who night and day yells at brain-dead Americans: "Any job, big or small — Mighty Putty repairs 'em all." Compared to what the current crop of presidential candidates are saying, Mays' words sound almost intellectual.

And besides, Billy Mays is a man of change. After all, by convincing us to go from glue to Mighty Putty, he's effecting a major shift in the way we live our lives. So, when Judgment Day arrives, I just hope Might Putty is still around. Especially if Billy Mays becomes our dictator.

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