to the editor from this week's Chronicle
No. 354 - 2/6/22
Today continues an impossible task! That "task" was mentioned back in RNR #351, and in brief form contended that the deplorable condition of our country's economy can be traced to a few basic beliefs! First, the growing conviction that the welfare of our nation and even the world can better be trusted to the genius of men, and no longer relevant is the old fashioned idea that trust in a God can help provide solutions to human problems.
Thus we see today efforts on the part of our government and many others in our world, to take control of a "climate change" or "global warming" problem. In the process, the decades use of fuels like oil and coal are to be discarded, and in their place substituted "green" sources like wind, water and solar. Despite the proven fact that the traditional sources to be discontinued supply at least 3/4ths of our energy today, and have been found to be useful for that purpose!
And our traditional economy stressing free enterprise which depends on private ownership of property, and a profit motive, coupled with the Christian stress on love of neighbor, respect for laws based on the Ten Commandments is being replaced by a socialist goal of equality of living conditions depending on a storehouse system based on "From each according to ability, to each as is the need." And the master craftsmen of these new ideas include Karl Marx and his Communist followers who preach the eventual evolution of a utopia on earth where all will be equally provided for, and John Maynard Keynes, whose economic theories will provide the system for bringing this new utopia into being!
But what does the news tell us today? That the "white race" is the problem, and that "people of color" are the victims, taught where ever CRT (Critical Race Theory) classes are found. An economy which is artificially thriving due to massive influxes of new money, created out of thin air by the Federal Reserve System in cooperation with close to $30 trillion of national debt of our government. The result? An ugly appearance of INFLATION, said to be around 7 percent at the consumer level, but crowding 9 per cent at the producer level. And growing by leaps and bounds in the future. Creating the ugly economic term STAGFLATION. A term which simply represents an economy struggling with runaway inflation on the one hand, but low demand for goods and high unemployment on the other.
To understand the cause of this current condition, look at the formula MV = PO, that can be traced back to various individuals important in the Austrian School of Economics (Names like Ludvig von Mises, and Milton Friedman and many others). M in the equation represents the amount of money in circulation, while the V represents the velocity, or the number of times a single dollar is spent in one year's time. (One $ spent over and over by different people raises V, whereas that $ hid under a mattress lowers velocity!) P on the right side represents the average price of the goods available for purchase, while the O represents the total amount of goods and services available at any time. Ignoring the V for now since it seldom changes a lot, it is claimed by the equation's supporters, that huge increases in M, the money in the economy will necessarily produce similar increases in P, prices, unless of course it is balanced by equally big increases in O, the output of goods and services produced by the economy. In our economy, the M has been increased repeatedly, called QE (quantitative easing), as much as $80 billions/month by the FED, and trillions of $ have been borrowed by government to give away in grants to people, businesses, and other recipients! The result? A roaring stock market buoyed up by FED zero, or near zero interest rates (Actually below zero really since inflation is now around 7 to 9% today!). And O, output? A well known fact is that output is down because of bankrupt companies, government required shutdowns, and lack of workers! (Continued!)