Why Austrian Economics Is Superior to Keynesian Economic Theory

Why Austrian Economics Is Superior to Keynesian Economic Theory

The debt of the U.S. is over 12 trillion dollars with unfunded liabilities more than five times greater.  At over 60 trillion dollars, these unfunded liabilities continue to come due as the economy contracts.  Deflation is occurring even as the banking system prints itself another 12 trillion to recapitalize after its theft of American wealth. 

What Americans don’t understand is that most wealth was not destroyed, it merely never existed.  What wealth did exist was transferred to the financial and power elite as they cashed in their chips and economic reality then established what the remaining stock was actually worth.

But, the trillions of dollars of debt and unfunded liabilites are manifestations of the false economy created by Keynesian economic practices in which the banking system, actually a money cartel, was allowed to create all the fiat paper money it wanted, which was only backed only by more fiat paper money.  The government loves this system because it can borrow all the money it wants and can steal producers’ wealth through inflation, which is a huge hidden tax charged mainly to savers. 

People who counted on derivatives to be a hedge against inflation are finding out that their wealth has been stolen by the elite who cashed out first, or were too big to fail and were then bailed out. 

Wall Street’s current profits are only due to banks printing money and then lending it to government at interest.  The federal governent  then takes that borrowed money and GIVES it back to the banks while paying interest for that money borrowed  with taxes collected from Americans.  

It is through the pyramiding of debt through a fractional reserve banking system that has been unleashed from any commodity-based standard that leads to unsutainability.  The Austrian explanation of the business cycle accounts for the inevitable crash that occurs as debt, interest and inflation begin their mathamatical exponential growth rate due to a contracting of the economy as it becomes satuated in debt and can no longer pay the interest on its debt.  This is because banks only create the money people borrow, but not the additional money people need to service interest on the debt.  The interest on the debt can only be pulled out of the economy if the economy is expanding.  If the economy contracts, the money dries up as it becomes concentrated in the hands of the lenders who are owed interest. 

When you borrow $150, 000 for your home, you have to pay three times that amount over a period of your 30-year loan.  But the bank only created the $150,000.  Where does the other $300, 000 in interest come from?  The answer is people have to pull it out of an expanding economy.  But, where does the money come from in a contracting economy that is already saturated in debt?  It is impossible for our economy to be self-sustainable in a system that requires exponential growth.  

In our system entrepreneurs earn capital through hard work and by putting resources and labor together in a ways that make economic sense.  The end result is that the product is worth more than the sum of its parts, therefore people will pay more than what the item costs to make and generate profits for the producer. 

But, bankers just print themselves all the money they want, bet that they will fail by short selling, and then work to fail to win on their bet.  They bet on their fixed bet to fail using the debt-based money whereby they print fiat currency instead of using any capital.  This allows them to steal billions of dollars in profits that were formed as the result of producers running profitable businesses and meeting market demands.  The problem is further exaberated as Wall Street no longer allows capital to flow in areas where business needs capital, but instead games the system to steal wealth.  A better analogy would be of a parasite that ends up sucking so much blood it kills the host.

After stealing trillions of dollars of middle-class money, Wall Street is now spending taxpayer bailout money at the rate of one million dollars per day buying off our crooked politicians to prevent any meaningful regulatory reform that would stop the theft from occurring all over again.  Any change that does come down will only be cosmetic, as Wall Street now dominates Pennsylvania Avenue.

Why was it that the day after 9/11 the government had thousands of pages in legislation already written and enacted that stole our rights and expanded government power?  Yet, the destruction caused by 9/11 pales in comparison to the amount of capital destroyed and stolen by Wall Street.  The destruction of the World Trade Center was a loss of about $1.5 billion.  Wall Street was allowed to print itself $12 trillion dollars in money that includes TARP, stimulus money, and other little known government scams that allowed banksters to print additional trillions.  Americans view the WTC as a great loss, yet the money lost in the mortgage and derivitives market, collateralized debt obligations, and credit default swaps represents the monetary equivalent of 8,000 World Trade Centers. It would have taken a nuclear attack on New York to destroy the kind of capital Wall Street grabbed.

Yet, the banking industry is trying to conduct a replay by buying off politicians using our own tax dollars to lobby against the interests of average Americans who lost their life’s savings and their chidrens’ inhertance to Wall Street in a confidence scam.  After losing people’s retirement funds, bilking investors, and stealing $12 trillion dollars from taxpayers, Wall Street is now foreclosing on homes and refusing mortgage renegotiation.  The same people who threatened martial law to get the taxpayer money they wanted, used the bailout money to lobby legislators to the tune of $1 million per day to keep the same rules in place  that created this mess.  Wall Street then told Washington the initial bailout was not enough and unless they got more money, alot more, they would not start lending again, essentially strong arm robbing Americans through their elected cowards, I mean leaders.  This was done after Wall Street had been bailed out with TARP money.  The Fed has more power than Congress when it can print itself 12 trillion dollars.  Meanwhile, inflation ends up costing a retirement age couple their entire nest egg to make it through a couple of years.

Now Americans have had a good look at the types of operations and scams run by the Federal Reserve, which is nothing more than an oligarchy of private banks that use the name “Federal Reserve” to make people think it is a federal agency.  The Federal Reserve is as federal as Federal Express.  It is private banking system whose member banks operate for the interests of its owners.

Obama has sold the White House to Wall Street and put the crooks in charge of the store.  These guys essentially control our government.  Geithner, Bernanke, and Paulson were all key players in the meltdown and Obama has decided to stuff the White House with Wall Street Executives.  Paulson was allowed to sell $500 million in stock and pay no taxes because he was taking over at the Fed and had to divest. He sold his stock to friends who lost millions.  Then he used his position and secrecy to pay all his friends back who bought his bum bets when he took over the Fed. 

Henry Merritt “Hank” Paulson, Jr. serves as the 74th U.S. Treasury Secretary. But, he previously served as the Chairman and CEO of Goldman Sachs, the company that purposely destroyed investors’ capital to make profits at the expense of its own clients by engaging in a criminal conflicts of interest and short selling instruments they knew were garbage but pawned as investment grade securities.  By creating garbage securities, selling them as investment-grade derivatives, and then short selling them, they were allowed to profit from their crash that they engineered.  It was a stroke of evil genius.  Then, the same people who created this garbage and short sold it were also able to collect on default insurance when these financial instruments crashed and burned and the loans went bust.

Ben S. Bernanke began a second term as Chairman of the Board of Governors of the Federal Reserve System on February 1, 2010. Dr. Bernanke also serves as Chairman of the Federal Open Market Committee, the System’s principal monetary policymaking body.  Youtube is filled with videos of Ron Paul slaughtering Bernanke in front of Congress, which matters not because Congress sells itself to the highest bidder and Wall Street will pay alot more for stupid, greedy, arrogant politicians than will Rep. Ron Paul.

Timothy F. Geithner became the ninth president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the vice chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy. President Obama nominated Mr. Geithner to be the 75th Secretary of the Treasury and the U.S. Senate confirmed him to the position on January 26, 2009.   Ron Paul has him studdering, cursing, double-talking, and finally agreeing with Dr. Paul about how their Keynesian policies destroyed the economy.

Ron Paul and Peter Schiff have explained why and how these Keynesian bankers destroyed wealth.  They were warning of the collapse when all these wizz kids were saying ”the fundamentals are sound”.  Dr. Ron Paul and Peter Schiff have educated Americans on the Austrian economic theory of business cycles.  Yet Americans are too stupid to listen and think for themselves.  It seems that it is easier for them to trust government.

Obama is a toadie for Wall Street and is no different from Bush in that he will sell out America for his own elitist financial interests.  His administration is made up of Wall Street executives, no Big Oil, no Big Pharma, no Big Auto, just Wall Street.

If you don’t know or understand Ron Paul, now is the time to discover the truth.  You can start at the Ron Paul Library www.ronpaullibrary.org or go the www.mises.org. The greatest weapon the Wall Street elite have is public ignorance and the second greatest weapon is the taxpayer money bankers use against taxpayers.  If we “End the Fed” we will have effectively ended a racket.  To find out about the war racket and how the elite profit, read two-time Medal of Honor winner, Major General Smedley Butler’s essay titled “War is A Racket”.  

There is only one man who wants to rectify this situation, and his name is Ron Paul.