Real Investment Advice/Lance Roberts/7-22-2022
“In other words, when you provide “free capital,” a market-based economy will adjust prices to compensate for the additional demand for products and services. Those primarily living paycheck-to-paycheck see their “disposable incomes” getting “taxed” away, leaving their standard of living unchanged. … Such is why socialism in any form does not elevate the middle class but shrinks it.”
USAGOLD note 1: Those who advocate and perpetuate MMT will not be deterred by the fact that it created more problems than it solved – including the inflation the Biden administration would like to contain. They are likely to argue instead that we need considerably more of the same.
USAGOLD note 2: “A democracy cannot exist as a permanent form of government,” wrote historian Alexander Fraser Tytler more than two centuries ago. “It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” He goes on to outline the cycle represented in the following illustration:
Tytler’s Cycle
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Image attribution: J4lambert, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons
