I.O.U.S.A - Addison Wiggin [72]
Austrian economics is different than the economics courses you would take in college because it takes into account the action of each and every individual. And of course the great book of Mises was called Human Action [1949; 4th rev. ed. Laissez Faires Books, 2008], so there ’ s a subjective element to economics so it ’ s really fascinating and much easier to understand. The reason why everybody has to be interested in this subject is out of their own self - interest, because if it ’ s monetary policy or economic policy it affects us. If you have socialism and it produces poverty then you don ’ t want it. If paper money eventually leads to runaway infl ation and destruction of the fi nancial system as well as the political system, you have to know about that. But a lot of people duck economic interest because what is taught in our colleges is so often very boring — and, quite frankly, often wrong. But free market economics explains how freedom and liberty generates free markets and free choices and essentially the only way you can have prosperity. So everybody, out of their own self - interest, should investigate and understand why free market economics is so important.
Q: Why is it that a family or a company has to stay on budget?
They can ’ t run defi cits forever, otherwise they ’ re going to end up in jail or living at home with their parents or something.
Why is it that the government gets away with running defi cits?
Ron Paul: Well, they do it because they have power, more power than they should have and certainly more power than the Constitution gives them. Our country was supposed to be designed not to have this type of authority, and we didn ’ t have the authority to tax before 1913. But they spend too much because they have taxing authority, and it seems to be part of human nature that politicians like more authority. And a lot of them c11.indd 148
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are motivated by good intentions; they always want to take care of people and manage their lives. Most politicians enjoy being somebody important, and the best way to do that is promise people something for nothing and not have to worry about really paying for it. Today, if we had to pay for fi ghting this war and fi nancing our welfare state, there would be a tax revolt in this country because it would cost so much.
But they can delay this by borrowing, by infl ating. That is literally just creating money out of thin air to pay the bills and delaying the payment. So the whole idea of these defi cits we run up and the fact that we have a fi nancial monetary system that helps encourage politicians to do exactly the wrong thing instead of working to limit the size of government and maximize individual liberty and maximize the marketplace . . . Politicians end up doing the opposite because they get rewarded. Most incumbents win by being errand boys, coming to Washington and delivering the goods. But my point over the years has been that eventually that system breaks down, and it ’ s very, very dangerous and very harmful to everybody concerned.
Q: Have you ever met a parent or grandparent who has admitted to you that they wanted a better life for themselves than they wanted for their children? If not, then why are we doing that?
Ron Paul : Well, the children are starting to recognize that there ’ s a tremendous burden placed on them and they will be taking care of those in retirement years. The old saying used to be that we always wanted a better life for our children, yet literally in the last 60, 70 years it ’ s been reversed: that the young people fi nance those in retirement. And it ’ s a mixed bag because a lot of people have paid into Social Security, and they make token payments for their medical care and they think that they ’ re getting their own money back, but their money has already been spent. I ’ ve been fi nding out lately that a lot of young people are coming to the realization