Unbeknownst to those trembling in fear of a squashing recession, the crushing recession they fear is the only curative for a fatally distorted system which has actually lost touch with reality.
Everybody looking at the inevitability of economic crisis with alarm is forgetting the numerous advantages of economic crisis, particularly one that crushes all attempts to reverse it with the typical tricks. Let’s not forget the easy joys of lighter traffic, faster commutes and the relative ease of getting a table at your preferred bistro– if it endures the bust.
Graveyard levity aside, there truly is no comparable to the positive force of crushing economic crises. Just economic crises which defy the typical techniques of monetary easing (create trillions of new dollars) and financial stimulus (hand out a few of those brand-new trillions) have the power to clean a system clogged with dysfunction, waste, fraud, corruption and financial zombies that soak of resources while doing little more than enhancing the few at the expenditure of the lots of.
The issue with complimentary cash is that there’s no system to compare waste and efficient investment or fraud and efficient utilization. All usages of free money are equally helpful because if this totally free cash is squandered, there’s constantly more to invest tomorrow. To put it simply, in a system in which free cash is the service to all issues, there’s no motivation to limit waste, friction or fraud since there’s constantly enough totally free money for both waste, friction and scams and required spending and investment.
Economic crises driven by inflation and the collapse of speculative bubbles aren’t fixable with totally free money since totally free money fires up the afterburner of inflation. Once there are limits on how much complimentary money can be created and distributed, squandering what’s left on waste, friction and scams indicates there’s inadequate delegated fund essential services and purchase the only real-world income and wealth, increasing performance— doing more with less capital, labor and resources.
Only squashing economic crises present the discipline of needing to pick between waste, friction and fraud and vital services and investments. Waste, friction and scams aren’t simply huge drains pipes on resources; they corrupt the system by incentivizing friction (ineffective complexity and gatekeeping) and scams (collusion, fraudulent billing, purchasing political favors, expert trading, and so on) and giving the receivers of friction and fraud the monetary methods to safeguard their fiefdoms with complexity thickets and political defense.
Financial systems that never experience crushing economic crises can’t discriminate between a speculative mania driven by corporate buybacks and a booming market driven by enhancing efficiency that raises both earnings and incomes. The counterfeit charade of speculative bubbles inflated by the Federal Reserve’s spew of complimentary cash for financiers fatally distort the entire reward structure of the monetary system, which then balloons up and fatally distorts the whole economy.
Unbeknownst to those shivering in fear of a squashing economic downturn, the crushing recession they fear is the only curative for a fatally distorted system which has lost touch with reality: yes, there is a difference in between speculative bubbles and bull markets, and yes, there is a distinction in between an economy riddled with the cancers of waste, friction and fraud and one strengthened by incentives and corrective mechanisms that bury unproductive zombie monetary entities and reward those who actually increase productivity rather than damage it.
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