Politically outrageous promises have hit the wall of limited resources. Reality is here. No amount of bluster or legislation can alter this fact. The laws of economics and mathematics are controlling.

Monty Pelerin at American Thinker

EXCERPTS:

Rothbard’s reasoning was simple: Economics is the interaction of people freely making choices while subject to minimal restriction (no theft, coercion, fraud, etc.).  Politics is coercion to force outcomes that otherwise would not occur.  Thus, politics is violence against economics, or people, because it precludes freedom’s running its natural course.
A couple of centuries earlier, Thomas Jefferson expressed the same sentiment:

Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.

Rothbard, as was often his way, came up with an incisive way of categorizing government activity.  Little that government does is not violence against economics.  Virtually every government program involves coercion to achieve an outcome that free individuals otherwise would not choose.  Otherwise, there would be no need for the program or legislation.

The continuing political violence against the economy has rendered the milk cow dry.

The damaged economy can no longer sustain the lifestyles that the American people have experienced for the past couple of decades. Much “prosperity” was phony in the sense that the credit bubble encouraged people to live beyond their means. Now begins the de-leveraging phase, where people must live “below” their means in order to pay down debt.

The corpulent political class cannot be sustained, either. Government tax revenues are insufficient to support spending. Government faces its own de-leveraging problem. Debt obligations and social promises cannot be met. Deficits cannot continue indefinitely, and the eventual rise in interest rates will impose new burdens.

It is tragic that so many citizens and their descendants will have to pay such a high price.

The world has changed as a result of the economy. More than living standards will be affected. The political calculus of the country has been irreparably altered.

The states in need of the biggest bailouts are the blue states. The 2012 election will be Democrats eating their own as a result of state budgetary problems.

By the 2012 election, the federal government will be struggling to avoid its own default, even with Ben Bernanke running his presses. Some municipalities and states will have reneged on various obligations. Survival of government at all levels will be an issue.

The social welfare state, a dystopian vision from the beginning, has had its fifteen minutes of history. It now begins its slow descent into the dustbin, alongside so many other tragic experiments.

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