We All Fall Down?

As the famous nursery rhyme goes, “Ring around the rosey, // A pocket full of posies // ashes, ashes. // We all fall down.” So the scare goes, which some believe will happen when or if the federal and state governments collapse. (As far as I have read, the rhyme was created around the time of the Great Plague in Europe; so though it does not relate directly to this topic, it provides some convenient markers for discussion.)

There is good reason to believe that current government policies will not last. The direct and indirect costs of government controls have never been greater. Government debt, already at record levels, is only projected to grow at an even faster pace for the next decade. When central banks are left with no choice but to raise their lending rates to curb monetary inflation, the cost of carrying debt will balloon, putting debt-ridden governments at greater risk of insolvency. In fact, the parasitic political class now constitutes a majority of the population as early as three years ago. Accordingly, it certainly seems likely that the ship of state is going down hard.

As a result, some further fear a violent backlash will follow the collapse of the federal government, which will trigger dependent state and local governments to come crashing down too. It is all nightmarish stuff, which is why those who actually care for the poor and needy should support reducing the size of government now.

Ring Around the Rosey

This is not the first time a government is facing impending doom. All governments at one time or another will collapse or be overthrown. That is no surprise. Even a constitutionally limited government, if one existed, would still employ violence to solve complex social problems. Under political government, ruthlessness is rewarded and productiveness is preyed upon.

A Pocket Full of Posies

I will take my literary license here and say the ashes sung about are the posies, or dollars, becoming worthless. That is definitely the trend for the past 100 years. Prior to 1913, it had been that the value of the dollar gradually increased, save for times of war. But with the creation of the Federal Reserve, the progressive income tax, and later moving to a fully fiat dollar, the decline of the dollar has signaled the transfer of wealth from the productive to the political class, who receive substantial income and privileges from government power.

Governments dreads deflationary periods (meaning a reduction in the supply of money in the economy). The availability of credit becomes harder, so government tax receipts go down as people begin saving more. Incomes and prices fall, which puts even less money in the hands of government.

An inflationary policy, meanwhile, loots people’s savings and tames their judgement of government action in light of their own increasing financial anxiety. The government’s economic outlook does not look as bleak relative to taxpayers’ own conditions. More importantly though, people become compliant when they fear the backlash of openly opposing government actions.

We All Fall Down?

So I have painted a pretty grim picture. And there is really nothing that can be done about it. I mean that. But even if my predictions come to pass, do not fret. That the dollar is backed by nothing works to our advantage. If the the dollar was still on a commodity standard, there would be real assets behind those paper promises, which would give people something to cling to.

When the dollar becomes worthless, people will just stop working for the government. The existing government people with any real power will be too busy slipping away with their stolen loot. Everyone else will just walk away. There is nothing to fight over because the dollar is worthless. Government employees switching to the private sector will rapidly increase productivity in the economy. Resources will be better allocated. It will not be easy, but the invisible hand is an incredible thing. We can soften any crash by getting people more independent, which is a good thing anyway. The federal government will still exist. They might still pass a flury of laws, such as to confisgate gold as happened under Franklin Roosevelt.

It will be a time of confusion for people. I do not expect a great majority are ready to face fundamental questions such as the scope of control they seek over other peaceful people. The more fundamental question worth asking is whether a 600-year-old solution called the nation-state, which has never delivered on the promise of maintaining peace and security, is worth saving.

In my mind, the move toward complete liberty will take place another day. First, it requires a change in people’s respect for themselves, rejecting the cannibalistic view of man as a sacrificial animal for society and, instead, replacing self-effacement with a new outlook that sees each individual’s life an end in itself.

Image credit: santheo, with a Creative Commons license