The Austrian School Deception : Austerity , Economic Snake Oil and Genocide

[Revolt426]

I'm fairly sure webster tarpley did not compile this piece therefore it is not the OP I am "attacking" but in actuality critiquing your source(s) for this economic model.

In addition to his rabid hatred of the austrian school and slamming of the non-existent free-market, he sets himself up in opposition rather than alliance as some of us have learned to operate effectively as. I do not subscribe 100% to any labeled POV and the austrian school is no exception though I see it has far more merit then any other presented model from the various schools of monetary reform ideas.

It doesnt help that every show and almost every appearance he has to defend his reform ideas as not being of a socialistic nature. I think its a clearly presented case of 'methinks he doth protest too much'

Again, you target Webster Tarpley when my entire essay merely quotes him a few times, can you say STRAWMAN?

How about critiquing MY ESSAY?. can you do that or can you just sling personal attack and scream "NO! BIG GOVERNMENT" like bloody murder (another Dogma since this has nothing to do with big Government).

As for his opposition, he does that because the policies of the Austrian School that i have attacked would destroy the planet, not to mention, the Chicago Branch and Milton Freidman ARE INDEED responsible for this MESS.

Are you aware that Larry Summers and Bernanke are FLAMING Milton Freidman lovers?. Bernanke even said to him on his death bed "You were right, we did cause the Great Depression and because of you, it will never happen again" - (Business Week Mid May). Are you aware Larry Summers confessed he is a Milton Freidman Lover?.

In any case, i am attacking both branches of the Austrian School (The Real one and the Diluted Chicago Branch) and it has nothing to do with Tarpley whatsoever - so if you wish to respond to something i have argued in the essay feel free to post.

[planning4acrash]

No, it is Obama who talks of Austerity. Ron Paul, an ardent Austrian Economist and Patriot, talks about us living within our means, but discusses redistributing untold wealth back to the populace via bringing back the troops, cutting overbearing Federal bureaucracies (all that are unconstitutional), followed by massive tax cuts, with welfare to the people only being cut once people have worked their way out of dependency.

[Revolt426]

No, it is Obama who talks of Austerity. Ron Paul, an ardent Austrian Economist and Patriot, talks about us living within our means, but discusses redistributing untold wealth back to the populace via bringing back the troops, cutting overbearing Federal bureaucracies (all that are unconstitutional), followed by massive tax cuts, with welfare to the people only being cut once people have worked their way out of dependency.

So , your argument is, Ron Paul has good virtues in regards to Foreign policy and other Conservatism, so he is automatically correct on his Economic Policies?.

I don't quite understand , No one is even talking about Ron Paul here, This is about the Austrian School of Economics and other alternatives.

[Geolibertarian]

So , your argument is, Ron Paul has good virtues in regards to Foreign policy and other Conservatism, so he is automatically correct on his Economic Policies?.

I don't quite understand , No one is even talking about Ron Paul here, This is about the Austrian School of Economics and other alternatives.

Neocons wrap themselves in the American flag when promoting their views; Obama cultists wrap themselves in the "anti-racism" flag when promoting their views; and certain Austrian Schoolers wrap themselves in the Ron Paul flag when promoting their views.

It's a shameless appeal to emotion, nothing more.

[planning4acrash]

Neocons wrap themselves in the American flag when promoting their views; Obama cultists wrap themselves in the "anti-racism" flag when promoting their views; and certain Austrian Schoolers wrap themselves in the Ron Paul flag when promoting their views.

It's a shameless appeal to emotion, nothing more.

No, Globalist-un-libertarian, it is shameless that you never refer to and discuss ACTUAL Libertarian theories when you try to criticize them. You simply state that the outcome is genocide, but give NO reasons, based on a true analysis of the Austrian Theory of the Business Cycle. It is you, my dear, who attempts to appeal to emotion, via fearing people away from sound economics.

[Revolt426]

No, Globalist-un-libertarian, it is shameless that you never refer to and discuss ACTUAL Libertarian theories when you try to criticize them. You simply state that the outcome is genocide, but give NO reasons, based on a true analysis of the Austrian Theory of the Business Cycle. It is you, my dear, who attempts to appeal to emotion, via fearing people away from sound economics.

I believe my entire essay highlights (probably more than 10) reasons that the Austrian Policies would kill a tremendous amount of people, the fact that the monetary supply would contract and the population would remain the same already proves this, but in addition to that - my entire essay is dedicated to exposing HOW the GENOCIDE would occur, and HOW IT HAS OCCURED on Precious Metal based systems in the United States.

You already know, Millions would be kicked out of their homes due to foreclosure after the monetary supply contracted and they were unable to pay their bubble denominated mortgages, but this is not enough for you. You do not care about (Over 10 Million people in the US and alot more world wide) , because you are a Sociopath and you would prefer to have Gold as a currency REGARDLESS of their deaths.

[Revolt426]

Libertarian ; a person who advocates liberty, esp. with regard to thought or conduct.

- Planning4Crash, you appear to advocate liberty for those who have Gold, and yourself - but how about the remainder of the world? Their Liberty is not very importent to you is it?.

[trailhound]

I believe my entire essay highlights (probably more than 10) reasons that the Austrian Policies would kill a tremendous amount of people, the fact that the monetary supply would contract and the population would remain the same already proves this, but in addition to that - my entire essay is dedicated to exposing HOW the GENOCIDE would occur, and HOW IT HAS OCCURED on Precious Metal based systems in the United States.

You already know, Millions would be kicked out of their homes due to foreclosure after the monetary supply contracted and they were unable to pay their bubble denominated mortgages, but this is not enough for you. You do not care about (Over 10 Million people in the US and alot more world wide) , because you are a Sociopath and you would prefer to have Gold as a currency REGARDLESS of their deaths.

Sigh ..its troublesome to have to find each thread where you put this disinfo and add a disclaimer. As the economy expands the currency becomes more valuable increasing the value of the savings of the frugal in the austrian system. Its simple really, the more demand the more the commodity is worth.  All your dire predictions are just a smokescreen for the fact that you want big govt control of the economy.

 The fake money supply is going to contract and gyrate anyway as would the system you propose which would put the power in the hands of the govt. So like right now in your system Pelosi and company would be having a f**king field day. Yeah great idea. (sarc)

[Michal Ptacnik]

Anybody noticed that there had been no cycles and crises based on economic manipulations before 1913? Give the Revolt426 a break; or do you think he is a cointelpro as well? Come on. He tries to give a meaningful idea to a discussion and you repay him with slander.

[Geolibertarian]

Anybody noticed that there had been no cycles and crises based on economic manipulations before 1913?

Only someone ignorant of history would "notice" that:

http://www.youtube.com/watch?v=K5xA2ail8gc
http://www.youtube.com/watch?v=wz7yBRihxSM
http://www.youtube.com/watch?v=-kANHaJXz0U
http://forum.prisonplanet.com/index.php?topic=98465.msg581305#msg581305
http://schalkenbach.org/library/george.henry/businessdepression.htm

[pizzedoff]

Call me simple but the easiest way out I see is to forgive all the interest on all debt.
All debt is money created from nothing, so to say that the lender would not make money by eliminating the interest is ludicrous as that $200,000.00 mortgage(debt) or the money it represents did not exist before the note was signed. So even if you eliminate the interest the lender has still made $200,000.00 from nothing.
Even if the loan defaulted at $50,000.00 it's still $50,000.00 from nothing.

[Michal Ptacnik]

I meant out of pure economic manipulation, based on nothing but on accounting, as opposed to cycles based on wars, findings of new sources of precious metals, etc. I guess that quick period when they tried to make a Central Bank in the 19th century would for this purpose count as post-1913 since it is short and similar. The greenback panics you mention are caused by the same people who caused the later crises. In other words, the free market only creates a new nobility that wishes to gain more power.

pizzedoff: Well, this and abolishing some forms of free enterprise or regulating it, that which naturally gravitate the society towards neo feudalism. It is not communism. It is a necessary protection of the republican (as opposed to monarchic/feudal/autocratic) system.

Call me a socialist communist pig if you will, but any society that has as it's object accumulating the most wealth in total as opposed to getting happiness for it's people and even at the cost of happiness of some of it's members  is in my eyes fundamentally flawed.

[Revolt426]

I meant out of pure economic manipulation, based on nothing but on accounting, as opposed to cycles based on wars, findings of new sources of precious metals, etc. I guess that quick period when they tried to make a Central Bank in the 19th century would for this purpose count as post-1913 since it is short and similar. The greenback panics you mention are caused by the same people who caused the later crises. In other words, the free market only creates a new nobility that wishes to gain more power.

Yes, you've noticed that too? . While i won't continue to respond to the *Same* weightless arguments over and over (looks a few posts above) , The Austrian version of "Free Markets" infact creates a power vaccume, and whoever has the most gold is the new JP Morgan, and considering they (The Elite) ALREADY have most of the Gold - Their arguments in this area are null and void.

The Austrian School ideals are based on a Utopian world where evil will never exist / return from existance, a world where there are no sociopaths, malthusians and the like - YET, if you do a bit of historic research, this HAS NEVER HAPPENED.

I would advocate the "Freest" markets possible WITHOUT parasitical sociopaths, bankers and royalty , and to do so ones sovereign Government must control the monetary supply, or their beloved "Free Markets" will control the monetary supply.

It's a simple thing to understand, you summed it up in a few words.

[trailhound]

Yes, you've noticed that too? . While i won't continue to respond to the *Same* weightless arguments over and over (looks a few posts above) , The Austrian version of "Free Markets" infact creates a power vaccume, and whoever has the most gold is the new JP Morgan, and considering they (The Elite) ALREADY have most of the Gold - Their arguments in this area are null and void.

 But they also have to pay for things in gold in the austrian system which means someone who worked could earn and save gold and invest it and get his own ball rolling and not have to worry about the govt destroying his/her savings by printing money  for atmospheric engineering, war, and God knows what all.

 It is not an empty argument to point out the kinds of things the govt spends money on now is friggin scary. You want to give them power to create money to invest in their pet projects?

[thrashbassist]

People should just take what they want from different schools of thought. Though by no means am I an expert, I agree with several arguments offered by the Austrian School and Ludwig von Mises (such as protection of private property, praxeology (sp?), and their views on inflation and central banking) but I don't suck their toes.

What I've learned is that rarely is any theory or school of thought perfect (or anywhere near it). The American Constitution is about as close to perfection as anything I've seen or read.

[Revolt426]

People should just take what they want from different schools of thought. Though by no means am I an expert, I agree with several arguments offered by the Austrian School and Ludwig von Mises (such as protection of private property, praxeology (sp?), and their views on inflation and central banking) but I don't suck their toes.

What I've learned is that rarely is any theory or school of thought perfect (or anywhere near it). The American Constitution is about as close to perfection as anything I've seen or read.

Which is exactly why i quoted the American Constitution in my essay, providing the clause allowing the United States Government to issue currency (Along with the General Welfare Clause) and our founding fathers.

I am not critiquing the entire Austrian School, infact i am highlighting the flaws that school seems so happy to push.

No one here is advocating the Federal Reserve System, however - their views on inflation are quite absurd. "If you print money, you get inflation" , well.... How about if you build something that promotes economic growth with the currency you just printed?

Is that going to cause inflation? i don't think so.... This ignores the prospect of deflation as well, something never mentioned by the Austrian School as if it didn't matter (when infact, deflation has caused nearly every depression in U.S. history)

I am not even advocating any Economic School infact, i am pointing out the flaws of the Austrian School so people do not go around preaching it as if it is the only alternative to the status quo.

[clearmyst]

Again, you target Webster Tarpley when my entire essay merely quotes him a few times, can you say STRAWMAN?

How about critiquing MY ESSAY?. can you do that or can you just sling personal attack and scream "NO! BIG GOVERNMENT" like bloody murder (another Dogma since this has nothing to do with big Government).

As for his opposition, he does that because the policies of the Austrian School that i have attacked would destroy the planet, not to mention, the Chicago Branch and Milton Freidman ARE INDEED responsible for this MESS.

Are you aware that Larry Summers and Bernanke are FLAMING Milton Freidman lovers?. Bernanke even said to him on his death bed "You were right, we did cause the Great Depression and because of you, it will never happen again" - (Business Week Mid May). Are you aware Larry Summers confessed he is a Milton Freidman Lover?.

In any case, i am attacking both branches of the Austrian School (The Real one and the Diluted Chicago Branch) and it has nothing to do with Tarpley whatsoever - so if you wish to respond to something i have argued in the essay feel free to post.

Tarpley is central to this argument as he was the one first bringing this "solution" under the limelight as he got himself in alex's good graces and began bringing up his crap about the free market gangsters and austrian landlords which shows a very revisionist viewpoint to say the least.

I've heard most of your premise argued in the rabid anti-free market rants that heoes on his weekly show. Its not a strawman argument to criticize the origin of this which is just more modern government interventionism repackaged under glowing ideals but amounts to little more than more bandaid treatment.

It is notwho fails to see the larger scale of destruction for the human race,
it is government control that is destroying us not a non-existent free-market which the CIA shills are slamming with great gusto and you and libertarian lite have seemed to become spellbound under the spiders weavings.

I advocate a dogmaless society which I'm sure you and webster wouldnt be pinned down into supporting so lets keep the talk of dogma where it belongs, squarely in the realm of pundits like tarpley who espouse this pro-intervention nonsense and hold a rabid hatred for the likes of ron paul and the austrian school.

One of the main issues here is that W.B. has set himself and his "solution" as opponents and directly antagonistic of the very people who helped launch ron paul into the mainstream, a candidate who shook the establishment unlike any other.
Did ross perot have bilderberg contemplating his assassination? I think not!
 It is very disrepectful of tarpley and cultists to slam the likes of lew rockwell, ron paul, von mises etc... as gangsters and literal plantation owners and that vitriol is what lies at the hear of the problem and why I will not take webster seriously.

And as for the Chicago school, they are not austrians and if you believe that as webster does your a f**king moron who needs to bone up on other reading material than internet pamphlet anti-free market spiels

[clearmyst]

People should just take what they want from different schools of thought. Though by no means am I an expert, I agree with several arguments offered by the Austrian School and Ludwig von Mises (such as protection of private property, praxeology (sp?), and their views on inflation and central banking) but I don't suck their toes.

What I've learned is that rarely is any theory or school of thought perfect (or anywhere near it). The American Constitution is about as close to perfection as anything I've seen or read.

I agree but these two have demonstrated a rabid hatred of the austrian school going so far as to be the first ones calling adherents "cultists"(at least libertarian lite was) and I am not a died in the wool austrian but do see much of their 'theory' as plausible and a damn sight better then the mess were in now.

[Revolt426]

Terrific! now can you comment on MY essay , rather then Tarpley... or is this going to be a never ending pattern (in which case i'll let you prove to the forum that you have no counter argument whatsoever by ignoring you).

[clearmyst]

My points stand clear and true.
By your silence I take it you either agree or know that the assertions are correct.
Its up to you.

[aLLyOuRbAsE]

i think it is unfair to load all of the current problems in the economy on "free markets" or "austrian economics".

now, i think there were some valid points made in your essay, but i also think there were some falsehoods. for instance, i agree that a gold standard as proposed by the austrian school would not be a good idea, for the reasons youve already mentioned like finite supply etc, it would make much more sense to have competing currencies and/or debt free currencies etc.

however, i do disagree with your attacks on the idea that the market knows better than the government, i am all for laws against fraud like the exchange rate controls, but do you really believe that the market can not set prices? how about labour? do you really think the government has a better idea of how to use labour than the market? is this not the invisible hand?

[zeke105]

If the point of your essay is to prove that Austrian Economics is not perfect, then you have succeeded. It takes little effort to find a flaw in any school of thought.

That's no reason to dismiss the entire school outright. I find many flaws in your arguments, and yet, I don't dismiss all your ideas as a result.

We have to take the best from all the schools of thought and build on them if we are to make any progress.

[Revolt426]

i think it is unfair to load all of the current problems in the economy on "free markets" or "austrian economics".

now, i think there were some valid points made in your essay, but i also think there were some falsehoods. for instance, i agree that a gold standard as proposed by the austrian school would not be a good idea, for the reasons youve already mentioned like finite supply etc, it would make much more sense to have competing currencies and/or debt free currencies etc.

however, i do disagree with your attacks on the idea that the market knows better than the government, i am all for laws against fraud like the exchange rate controls, but do you really believe that the market can not set prices? how about labour? do you really think the government has a better idea of how to use labour than the market? is this not the invisible hand?

No where in the paper do i suggest micro management, the issue is currency issued into productive infrastructure and highlighting the problems with the Gold Standard.

Currency for Labor in the form of Physical Economic Infrastructure - there was no macro economic argument or argument that prices can be fixed by the Government.

[Revolt426]

If the point of your essay is to prove that Austrian Economics is not perfect, then you have succeeded. It takes little effort to find a flaw in any school of thought.

That's no reason to dismiss the entire school outright. I find many flaws in your arguments, and yet, I don't dismiss all your ideas as a result.

Yeap well, there are appearently a large number of people advocating it with no compromise , and i attacked it's problems not the whole school.

We have to take the best from all the schools of thought and build on them if we are to make any progress.

I agree!

[thrashbassist]

Yeap well, there are appearently a large number of people advocating it with no compromise , and i attacked it's problems not the whole school.

Well, that's basically the same as Republicrats who blindly tow the party line no matter what common-sense tells them.

[Revolt426]

Well, that's basically the same as Republicrats who blindly tow the party line no matter what common-sense tells them.

And how exactly do you come to this conclusion?. Pointing out major faults that could actually kill a large number of people if an economic reform is implimented is the duty of every citizen.

[thrashbassist]

And how exactly do you come to this conclusion?. Pointing out major faults that could actually kill a large number of people if an economic reform is implimented is the duty of every citizen.

Dude, I'm referring to the people who blindly follow every letter of the Austrian School.

[Revolt426]

Dude, I'm referring to the people who blindly follow every letter of the Austrian School.

Laugh, well then - you've got me there - i apologize.

[aLLyOuRbAsE]

you often citied the "invisible hand" as a ridiculous thing and something that was wrong, i was just curious for clarification on that.

i agree the gold standard has limitations which mean it is not practical now, and that the issuance of new currency is best spent interest free directly into the economy in ways you described, but you gave a distinct impression that you viewed 100% of austrian economics as lies, and i would like to know whether this was a specific belief or something maybe said without the intention of being so absolute.

indeed, i too see flaws with the austrian school, but i also see things that remain true, so i was wondering where you draw the distinction between the ideas themselves and simply the school itself.

[thrashbassist]

Laugh, well then - you've got me there - i apologize.

No prob.

[Revolt426]

you often citied the "invisible hand" as a ridiculous thing and something that was wrong, i was just curious for clarification on that.

I actually said there is an invisible hand, however the population corresponds with the economic correction (meaning the population dies, along with the economic correction) if certain things are not done in certain economic systems. *amended* meaning REFORMING them.

[aLLyOuRbAsE]

I actually said there is an invisible hand, however the population corresponds with the economic correction (meaning the population dies, along with the economic correction) if certain things are not done in certain economic systems.

im not sure i follow, certain things? i get that a market correction may result in loss of life, are you saying there is a way to have market corrections without hardship? or even there is a way to not have the correction in the first place?

[Revolt426]

im not sure i follow, certain things? i get that a market correction may result in loss of life, are you saying there is a way to have market corrections without hardship? or even there is a way to not have the correction in the first place?

Yea, have a sound system where the money represents the population levels and labor that it has produced.

When there is a Depression (or economic collapse) you do not stand back, and watch the entire world implode (or explode) - you do something about it.

The current situation is un-correctable without Government Intervention in the form of wiping derivatives out and overhauling the FED into a real monetary system.

[aLLyOuRbAsE]

i wouldnt call that government intervention, and any infrastructure spending should not be financed by borrowing or debt.

im still unsure where the boundaries are for you, you proclaim belief in the free market, yet believe government intervention is better? is that it?

also, just having a sound system would not prevent any and all corrections, there are things that can happen that are outside that scope, like earthquakes etc

[Revolt426]

i wouldnt call that government intervention, and any infrastructure spending should not be financed by borrowing or debt.

No it should be financed by issueing currency because it directly corresponds with the population and economic expansion (Productivity) of the nation.

im still unsure where the boundaries are for you, you proclaim belief in the free market, yet believe government intervention is better? is that it?

In our particular situation, without wiping out (at least) 1.5 Quadrillion dollars in unprinted speculative , ficticious , paper on debt capital - the planet will collapse,  hence the Governmnet must put the entire system into chapter 11 Bankruptcy Re-Organization and FREEZE them to preserve humanity.

also, just having a sound system would not prevent any and all corrections, there are things that can happen that are outside that scope, like earthquakes etc

No, but it would provide for a better standard of living, and a Surplus for the Government to actually assist the population in scenerios like Hurricane Katrina , in which many people needlessly died and lived in poverty (To this day).

[planning4acrash]

i wouldnt call that government intervention, and any infrastructure spending should not be financed by borrowing or debt.

im still unsure where the boundaries are for you, you proclaim belief in the free market, yet believe government intervention is better? is that it?

also, just having a sound system would not prevent any and all corrections, there are things that can happen that are outside that scope, like earthquakes etc

Revolting, the avoidance of the correction IS the problem, because it was the boom that misalocated resources. We need the correction to happen, so that people can get on with the business of producing. You clearly have no understanding of the Austrian Theory of the Business Cycle.

[Revolt426]

Revolting, the avoidance of the correction IS the problem, because it was the boom that misalocated resources. We need the correction to happen, so that people can get on with the business of producing. You clearly have no understanding of the Austrian Theory of the Business Cycle.

I have already addressed in my essay that this is not a "correction", but an orchestrated implosion break-down of the economy, therefor not "Avoiding the correction" would result in massive genocide on a global scale as highlighted in the first quotation of my essay [1.5 Quadrillion dollars in private sector/off books speculative derivative contracts and a 5 Trillion dollar infrastructure deficit are causing this Depression/Collapse].

The Derivatives are not Government creations and are sucking the life out of all Commercial Bank credit issuence, Thankfully you stray from the Austrian school on this issue and agree that they must be wiped out.

The Infrastructure is falling apart and threatens to destroy the economy as well [it has not been updated since 1958 for the most part] , the essay shows the amount of potential infrastructure failures we may have due to neglect.

[trailhound]

"It must be stated, at this point in this report, that any actual collapse of the U.S. dollar would set off an immediate, global chain-reaction, sending the entire planet into a collapse from which, unless we act now to prevent this, civilization would not recover for a long time to come.

 Oh come on civilization isnt going anywhere. Just cause some people who lived way beyond their means would have to suck it up and actually come down to the street level with the rest of us commoners doesnt spell out the collapse of civilization. You remind me of some of these liberals who define poor as not having a tv in every room of your house.  All this fear and loathing is for those who built their house on the sand. Worse case scenario plant a freakin garden and sacrifice some of those 5 dollar lattes...

Thus, there is no way in which a system which proposes to exclude the U.S. dollar, could survive even during the very short term. That is to emphasize, that if the U.S. dollar ceases to maintain approximate parity among the principal national economies within the world system, the collapse in value of the outstanding U.S.-denominated obligations, would plunge every part of the planet into a virtually immediate general breakdown-crisis, into a prolonged new dark age from which few among today’s national cultures, and only a relatively small minority of the population of the world would survive in the end....

....It must be stressed, as I shall make clear in the course of this report, that without the presumption that that mass of presently existing dollar-denominated debt is fungible, we have reached the point of a potential, global hyperinflationary explosion (or, simply a general collapse of the entirety of the present world system). That means that an immediate collapse of the perceived value of the dollar itself would trigger a general, and quasi-permanent, physical-economic, chain-reaction form of breakdown of every national economy of the world, that occurring in the modality of a more or less simultaneous implosion of the physical economy and culture of every people of the world..."
- Lyndon LaRouche A British, Malthusian Swindle: A NEW WORLD CURRENCY AS FRAUD
https://www.larouchepac.com/node/9861

 Well God forbid we look at sound currency

We are currently in the worst economic breakdown crisis in the history of humanity, and a worrisome grassroots movement of people who have been utterly brainwashed by the Austrian School of Economics, which is nothing more then a cult because there is never any compromising with the followers of this school. If it isn't their way, it's wrong. The Austrian school has been equated with the only solution to provide what they euphemistically call "Free Markets" and this is a lie.

I am not a strict austrian i am open to any better ideas i just havent seen them yet

Due to this grassroots movement of brainwashed people ,  the issue must be raised that the Foundations of  the Austrian School of Economics are 100% distortions, lies and trickery.

100% eh? This makes you come across as really disingenuous right out of the gate.

Due to this grassroots movement of brainwashed people ,  the issue must be raised that the Foundations of  the Austrian School of Economics are 100% distortions, lies and trickery. The fact of the matter is, if Austrian methodology is imposed on the people of the world it will result in a massive and sudden drop in population levels and the return to what some would call, the Stone Age. The primary flaw in this school is that it does not take into account that a physical economy is primarily based on science and not mathematics. If you use mathematics for all economic theory, you are eliminating something called Dynamics. Dynamics can occur in population levels, events (wars, disasters) , or even orchestrated economic breakdowns such as the one we are currently witnessing. The Austrian response to what we are currently experiencing is, "This is a correction" - on the contrary, this is an Orchestration via the privatized issuance of money, designed to de-populate the planet. The Austrian Solution , allow the system to collapse and de-populate the planet.

 Again you make such dire predictions. People will find a way to survive and i dont think it would be nearly as ugly as you describe. Even if there were a few casualties there wouldnt be as many as world wars cause. The austrian system would severely hinder the govts capabilities of creating huge war scenarios for huge profits for their masters. Your system would not fix this problem Revolt and Geo and in this regard ya'll are looking a bit like snake oil salesmen yourselves.

The Austrian school would prefer "DEFLATION", which can be more destructive then Inflation as shown in nearly every Depression in United States history, including the Panic of 1837 which was caused by a Domestic Gold Standard. Regardless, there are OTHER solutions to the issue at hand then putting a CAP on Populations that will provide us with a sound currency.

 Deflation is not the end of the world. As the 'economy expands' meaning ok there's more people producing products the prices come down. This sets off chain reactions in competitive free markets. If Joe's bubblegum factory doesnt have to pay such high gas and oil prices it frees up capital in his business (growth?) and now he will have to look at lowering his prices so a competitor doesnt come along and say gee i could sell gum for 25 cents a pack and still make a good profit. You see? It evens out and the money expands in VALUE rather than amount. In your strange view if somebody could sell me a cup of coffee for 5 cents like it used to be then i would be deprived of some great civilization.  I got chuckle at that. Oh my prices are coming down! So what? So some chump who thought he was getting over would just have gotten over on himself, honestly i could care less. These are the people howling about the collapse of civilization if we just got rid of all the funny money.

Lincoln, Gold, and Greenbacks

by Thomas J. DiLorenzo

 When Abraham Lincoln first entered politics in 1832 he announced to Illinois voters that "My politics are short and sweet, like the old woman’s dance. I am in favor of a national bank . . . in favor of the internal improvements system and a high protective tariff." These three things – central banking, protectionism, and what we today call corporate welfare (for the railroad and road-building industries) are what Lincoln would devote the next twenty-eight years to achieving, working tirelessly in the political trenches of the Whig and Republican parties. In doing so he became a master politician, a designation that the founding fathers warned all citizens to be fearful of.

The year 1832 is significant because that was the year of the big showdown over the rechartering of the Bank of the United States between President Andrew Jackson and the bank’s president, Nicolas Biddle. Jackson won the showdown, the bank became defunct, and the Whig Party was created largely in response to it and in response to Henry Clay’s failure to prevail with the "Tariff of Abominations," which would have raised average tariff rates to nearly 50 percent.

A central bank was the potential political lifeblood of the Whig Party, and no one was more devoted to resurrecting it than was Lincoln. As University of Virginia historian Michael Holt writes in his treatise, The Rise and Fall of the Whig Party, during the 1840, 1844, and 1848 elections Lincoln "crisscrossed the state ardently and eloquently defending specific Whig programs like a national bank . . . . Few people in the party were so committed to its economic agenda as Lincoln." In 1848 Lincoln stumped for Zachary Taylor, promising that if he were elected he would revive the central bank. He would continue to criticize Jackson and advocate central banking for the rest of his political career.

In Monetary Policy of the United States Richard Timberlake clearly explained the paramount importance of central banking to the political ambitions of Lincoln and his fellow Whigs: "To the Whigs . . . a national bank was their life – the vital principle – without which they could not live as a party – the power which was to give them power . . . . To lose it, was to lose the fruits of the election, with the prospect of losing the party itself." In other words, the Whigs always intended to use a central bank, and the printing of paper money not backed by gold or silver, as the means of financing massive patronage schemes ("internal improvements") that they hoped would keep them in power indefinitely. This is precisely why the Jacksonians were so opposed to it.

Andrew Jackson and the Bank War

The best published account of the "bank war" between Andrew Jackson and Nicolas Biddle is Robert Remini’s Andrew Jackson and the Bank War. Jackson considered fiat money to be "the instrument of the swindler and the cheat. For Andrew Jackson, hard money – specie – was the only legitimate money; anything else was a fraud to steal from honest men." (Remini, p. 19). Jackson also believed that the doctrine of states’ rights meant that a central bank was unconstitutional. This view was quite pervasive, especially in the South. As Timberlake writes (p. 83): "The states . . . . were properly jealous and fearful of encroachment by the federal government. Since a central bank would necessarily be a federal bank and would maintain and operate state branches from a distant center, proponents of states’ rights found opposition to a national bank almost mandatory."

Jackson suspected that a central bank would be controlled by Northern bankers and would be used to manipulate politics. Remini does point out that the strongest support for the bank came from New England, whereas the fiercest opposition came from Southern politicians like Jackson.

Jackson had good reason to fear political manipulation by a central bank. The first president of the Bank of the United States (BUS) was Navy Captain William Jones, who had no banking experience and who had just gone personally bankrupt. Murray Rothbard blames him for the Panic of 1819 in his book of the same title, which is cited by Remini.

The Second BUS was run by Nicolas Biddle, who continued to politicize the bank in many ways, including granting low-interest loans and "consulting contracts" to politicians who would support the bank’s expansion. Jackson’s Treasury Secretary, Roger B. Taney (the future chief justice of the U.S. Supreme Court) complained of the bank’s "corrupting influence" and "its patronage greater than that of government" for good reason. As Henry Clay biographer Maurice Baxter wrote in Henry Clay and the American System, Clay (Lincoln’s political role model) left Congress for two years in 1822 after having incurred $40,000 in personal debt to become general counsel of the BUS. His income from this caper "apparently amounted to what he needed" to pay off his personal debts, writes Baxter. "When he resigned to become Secretary of State in 1825, he was pleased with his compensation."

Another prominent Whig, Daniel Webster, did not even bother resigning from Congress before collecting bribes. He simply demanded a "retainer" from Biddle "If it be wished that my relation to the Bank should be continued."

Biddle proved Jackson’s charges of political corruption to be correct when, during the 1828 election he spent more than $100,000 of the bank’s money in support of Jackson’s political opponents; promised BUS money to friendly politicians to spend on "internal improvements" schemes; paid for the reprinting of Henry Clay’s speeches in support of the BUS; and paid for newspaper ads that promoted himself and the bank and attacked Jackson.

The U.S. Supreme Court ruled that a central bank was constitutional, but it is important to keep in mind that, prior to the War for Southern Independence, it was not at all universally agreed that the federal government itself should be the arbiter of the limits of its own powers. That is, Supreme Court decisions were viewed by many, including President Andrew Jackson, as mere opinions and not Holy Writ, as they are today. As Jackson said in response to the Court’s decision:

    To this conclusion I cannot assent. Congress and the president as well as the Court must each for itself be guided by its own opinion of the Constitution . . . . the opinion of the judges has no more authority over Congress than the opinion of Congress has over the judges, and on that point the president is independent of both. The authority of the Supreme Court must not, therefore, be permitted to control the Congress or the executive when acting in their legislative capacities.

For the next several decades the political battle would continue over central banking, with such advocates of a more centralized and omnipotent state as John Quincy Adams, Webster, Clay, and Lincoln on one side, and John C. Calhoun and the Jacksonians on the other. As Remini writes, "Calhoun argued in favor of a system that would convert the United States to the gold standard exclusively."

The Independent Treasury System

The demise of the BUS led to an alternative banking system known as the Independent Treasury System, which was put into place in 1840, ended by the Whigs in 1841, resurrected in 1846, and ended finally during the Lincoln administration. As Jeffrey Hummel wrote in an essay on President Martin van Buren in Reassessing the Presidency, the Independent Treasury System, under which the only legally recognizable money was gold and silver coins and all currency was redeemable in specie on demand, "ushered in an era of financial deregulation at the national level." It was probably the most stable monetary system in American history, according to Hummel. Timberlake writes that "The Independent Treasury may well appear in retrospect as the optimal monetary-fiscal institution within the basic framework of a gold standard."

Lincoln the Bank Whig

Abraham Lincoln was fiercely opposed to the Independent Treasury System. On December 26, 1839, he gave a speech in opposition to it and in support of central banking in Springfield, Illinois. The speech was Clintonian in length and charged that the system would generate economic instability, be extremely expensive to operate, would be an insecure depository of money, and would "reduce the quantity of money in circulation." These turned out to be red herring arguments.

Lincoln’s speech was quite extreme and even bizarre in some respects. He quite hysterically claimed, for instance, that under a gold and silver standard "All [will] suffer more or less, and very many will lose everything that renders life desirable."

Lincoln was not a religious man, and many of his contemporaries believed he was an atheist. But being a consummate politician he frequently invoked Scripture in his speeches, including this one. "The Savior of the world chose twelve disciples, and even one of that small number, selected by super-human wisdom, turned out a traitor and a devil. And, it may not be improper here to add, that Judas carried the bag – was the Sub-Treasurer of the Savior and his disciples." An Independent Treasury System would supposedly be a "traitor" to the American public just as Judas betrayed Jesus, said Lincoln.

About a year later Lincoln had become a leader in the Illinois legislature and he repeatedly opposed proposals by Democrats to audit the Illinois state bank. In December 1840 the Illinois Democrats wanted to require the bank to make payments in gold or silver instead of paper. The bank was authorized to continue its suspension of specie payment through the end of the year. Lincoln wanted desperately to avoid this outcome, so he bolted for the door and instructed his fellow Whigs to follow him. Without a quorum the legislature could not vote to adjourn, and the suspension of specie payment would continue.

But the door was locked and guarded, so Lincoln literally jumped out of the first-floor window, followed by his lemming-like Whig followers. The Democrats ridiculed him as "Lincoln and his flying brethren," and his stunt failed anyway.

In What Has Government Done to Our Money? Murray Rothbard explained the significance of the phrase, "suspension of specie payment." This explanation clarifies just what it was that Lincoln and the Whigs (and later the Republicans) were fighting so vigorously for.

    The bluntest way for government to foster inflation . . . is to grant the banks the special privilege of refusing to pay their obligations, while yet continuing in their operation. While everyone else must pay their debts or go bankrupt, the banks are permitted to refuse redemption of their receipts, at the same time forcing their own debtors to pay when their loans fall due. The usual name for this is a "suspension of specie payments." A more accurate name would be "license for theft," for what else can we call a government permission to continue in business without fulfilling one’s contract?

Richard Timberlake was right: The Whig Party failed to revive the BUS and, without an ability to promise taxpayer-financed subsidies to its big business supporters, the party imploded in the early 1850s. Many of the same special interests that had supported the Whig Party then supported the new Republican Party. Lincoln assured his Illinois constituents that there was not policy difference at all between the Whig and Republican Parties.

Lincoln’s Banking Legislation

As soon as Lincoln took office the old Whig coalition finally controlled the entire government. It immediately tripled the average tariff rate, began subsidizing the building of a transcontinental railroad in California even though a desperate war was being waged, and on February 25, 1862, the Legal Tender Act empowered the Secretary of the Treasury to issue paper money ("greenbacks") that were not immediately redeemable in gold or silver. The National Currency Acts of 1863 and 1864 created a system of nationally chartered banks that could issue bank notes supplied to them by the new Comptroller of the Currency, and a 10 percent tax was placed on state bank notes to drive them out of business and establish a federal monetary monopoly. The government’s paper money flooded the banks so that by July 1864 greenback dollars were worth a mere 35 cents in gold.

Ever since the days of Andrew Jackson American presidents had opposed a fiat money system. The Jacksonian opposition to central banking was ended, literally, at gunpoint. Lincoln’s main role was to avoid doing what presidents had done for the previous three decades: veto central banking legislation. There was no chance of that since Lincoln, unlike Jackson and President John Tyler, was a career-long advocate of central banking and fiat money.

Financing the American Empire

The Republican Party establishment, led by Lincoln, was very clear on what it hoped to achieve with a central bank. As Heather Cox Richardson recounts in The Greatest Nation on the Earth: Republican Economic Policies During the Civil War, Senator John Sherman, brother of General William Tecumseh Sherman and chairman of the U.S. Senate Finance Committee, declared, "nationalize as much as possible, even the currency, so as to make men love their country before their states. All private interests, all local interests, all banking interests, the interests of individuals, everything, should be subordinate now to the interest of the Government." This is a perfect rendition of the collectivist philosophy that would plague the twentieth century with its insistence that citizens are to be the mere servants of the state, rather than the other way around.

The sponsor of the banking legislation in the House of Representatives was Congressman Elbridge G. Spaulding, a New York banker. Spaulding clearly argued that the new fiat money system would finally clear the way for the mercantilist system of massive "internal improvement" subsidies. The New York Times published a celebratory editorial on March 9, 1863, in which it said, "The legal tender act and the national currency bill crystallized . . . . a centralization of power, such as Hamilton might have eulogized as magnificent."

Kentucky Democrat Lasarus Powell was not as enthusiastic. "The result of this legislation," he said, "is utterly to destroy the rights of the states. It is asserting a power which if carried out to its logical result would enable the national Congress to destroy every institution of the States and cause all power to be consolidated and concentrated here [in Washington, D.C.]." But of course it would; that was always the intention of The Party of Lincoln.

The Party of Lincoln wanted to transform the American government from the limited, constitutional republic of the founding fathers to an empire that would rival Great Britain’s, and they knew they needed a central bank to achieve that task. Empires are very expensive propositions, as they require sending armies and navies all over the globe. As Richardson explains: "By 1863 the Republicans envisioned a dominant international role for a unified American nation, and [Senator John] Sherman promised that the bank bill, with its implicit strengthening of the national government, would advance that goal" (emphasis added). The Republicans under Lincoln "were building a new economic role for an increasingly powerful national government, permanently involving it in the country’s monetary affairs."

1.) First and foremost, there is not enough Gold in the entire world to facilitate the expanding population's need for currency and economic expansion.

 Im sorry that is just ass backwards. The bigger the population the more purchasing power each coin has its really quite simple. So what if a stick of gum costs 1/8 of a cent (bills could be issued) and a skyscraper cost 200,000?  This whole idea that bills couldnt be issued and yet still tied to hard currency is a farce.

 See here even formerly communist countries are seeing the light, discipline, and benefits of hard money.

http://www.telegraph.co.uk/finance/financetopics/g20-summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-crisis.html

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.



 

As one can see, we are in a FAR WORSE situation then the Great Depression - and one could only hope for an FDR or Lincoln right now in light of what we face.

  i think your going to get your wish...sigh..also note there was a depression in the 1890's

[trailhound]

 I have a question for you Revolt and Geo. What would you think about the reforms you propose being done and then the infrastructure the govt decides to print into existence is the Venus project.

[Geolibertarian]

Im sorry that is just ass backwards. The bigger the population the more purchasing power each coin has its really quite simple.

No, as usual it's the Austrian School that is ass-backwards, because according to them, the mere fact that the gold-backed Federal Reserve Note had 20% more "purchasing power" in 1932 than in 1928 means that the average American should have been, if not better off than before, then at least no worse off.

The reality, of course, is that most Americans were considerably worse off than before.

And this was hardly the first time that "deflation" had had this sort of disastrous effect on people's lives (the very "effect" which Austrian Schoolers blindly insist it doesn't have):

----------------------------------

"[Andrew] Jackson and Van Buren removed the monetary power from the private bankers but did not re-establish it in the hands of the nation. Instead, Van Buren organized the Independent Treasury System, establishing 15 sub branches of the Treasury to handle government moneys in 1840. From December 1836 the government moved toward making and receiving all payments in coinage, or truly convertible bank notes....Once the state bank notes were no longer accepted by the government, their circulation was cut back dramatically.

"This was the closest our nation has ever come to implementing a real gold/silver standard. Operating under the commodity theory of money, Van Buren, who truly cared for the Republic, helped bring on the worst depression the Nation had ever seen, starting in 1837. It was reportedly even worse than that caused by the 2nd Bank of the U.S. in 1819. Bad as the state bank notes were, they had still been functioning as money!

"Those who proclaim that no gold and silver money system has ever failed should consider that whether you are a laborer, farmer, or industrialist, the money system's success or failure is not measured by the value of a piece of metal. When your job, your farm, or factory has disappeared in a monetarily created depression, the system has failed!" [Emphasis added]

-- Stephen Zarlenga, The Lost Science of Money, p. 426

----------------------------------

The fact that Austrian Schoolers continually make blanket assertions that blatantly contradict historical reality shows that they are, indeed, in the business of peddling "economic snake oil."

http://monetary.org/refute.htm