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Government TruthOftentimes we are thrown into discussions about the so-called "benefits" that governments provide to "society" at large (this is, of course, assuming that the term "society" actually means something tangible - which does not - see for example Do Not Talk To Us About Society).

This type of discussion and argumentation invariably ends up in something like this:

If governments would not exist, who will pay for (insert your favourite "free" government good or services here)?

And invariably "free" government goods and services include a long laundry list of items such as:

  • Schools,
  • Roads,
  • Health Care,
  • Parks and/or Recreational Activities
  • Higher Education
  • Pensions
  • Military
  • And on and on and on.

Hopefully, you get the idea.

And to be fair, it is true that if we would all (or at least large proportion of blackmailed people aka taxpayers) decide to stop paying taxes, the so-called "revenue" (i.e. blackmail money) that governments "collect" (i.e. extort) would be insufficient to pay for all those goods and services.

Furthermore, we freely acknowledge that should that happen the poorest segments of the population would be hit the hardest.

So, are we wrong then? Should we keep paying taxes like good drones?

In a word? No.

This is so because all those arguments make one critical assumption which is also a massive fallacy; all things are not equal!

In other words, people making those arguments assume the same level of economic activity will be present whether or not we pay taxes and this is wholly incorrect. It is funny how politicians insist that in order to stimulate the economy they need to borrow and spend (spending being the operational piece of the "stimulus"). However, when it is postulated that personal spending through lowering of taxation (i.e. increasing the so-called "disposable income") would achieve the same results without increasing public debt, the politicians are wholeheartedly against it!

Interesting point of view, to say the least.

If we do it, it is OK and beneficial. On the other hand if you do it, it is malevolent, destructive, counterproductive, antisocial and fosters inequality!!!

Sounds familiar?

The point that we are trying to make is that any move towards Libertarianism, for example by lowering taxes and removing regulations, necessarily increases economic activity. This means that entrepreneurship rises and with it the lowering of costs for goods and services. This means dis-inflation (i.e. the good stuff) as opposed to inflation (i.e. the bad stuff).

In other words, any move towards Libertarianism makes your money more valuable by decreasing the costs of goods and services. Which means that the poorest segments of the population begin to become wealthier with access to better and more copious amounts of goods and services. Which means that the cost of:

  • Schools,
  • Roads,
  • Health Care,
  • Parks and/or Recreational Activities
  • Higher Education
  • Pensions
  • Military

And on and on and on.

Drops and drops and drops making them available to people who in these current political and economic conditions cannot access them without "free" government services.

All things are most definitively not equal!!! (see for example Fake Money For A Fake Economy and Real Money For A Real Economy).

These arguments are stupid (or purposely deceptive) because they argue for applying a new set of conditions to a future economic state but they conveniently forget that, that very set of new conditions will alter future economic conditions!

This is obviously retarded.

There is a similar phenomenon in quantum mechanics. It is called the Principle of Uncertainty and in non-mathematical terms it dictates that the very act of watching a quantum phenomenon will introduce variations into it. Thus, we can never be absolutely certain of what are the quantum participants doing in that phenomenon. The very act of watching has altered the experiment.

Now think about it.

This principle talks about a simple act of watching a phenomenon. Economists, socialists, politicians and all kinds of disturbed and disturbing people argue that changing economic conditions will not alter those very same economic conditions while everybody is watching and will do nothing with this information!

Yes, their argument is that stupid.

Again, all things are not equal!

The economy is not a multi-variable formula where we can calculate the derivative on one variable while maintaining all the other variables constant (there, if you are mathematician or a physicist, this should get you started).

The economy is a mass of people acting in their own best interest in a personal and subjective manner (see for example Austrian Economics For Dummies - Entrepreneurship and Austrian Economics For Dummies - Purposeful Action). Variations in economic conditions affect people and people react when they are affected. Period.

It is ridiculous to argue that changes to economic conditions will not alter the behaviour of people. Yet, this is precisely what they argue.

So, the next time you are confronted with such a stupid argument, you have a choice to make. You either tell them to stuff-it and go study Economy (particularly Austrian Economics) or to put their theory to the test.

How do you ask?

Tell them that from now on they must gift you 10% of their monthly income. If their theory is correct, this should have zero impact in their economic behaviour… with the added benefit of making you 10% richer.

Any takers?

Though so.

Look, this is not complicated. You can either believe those idiots who have been screwing around with the global economy for over 200+ years and who landed us in the current debacle, or, you take a look at what you do and how you feel when your personal economic conditions change. And then ask yourself a simple question: am I different from everybody else in so reacting?

We can bet that the vast majority of the people will answer: NO!

And there you have it. Yet another conundrum solved through the magic of Austrian Economics.

Believe it or not.

But then again. You are free to be as stupid as you chose to be. Just one thing, when you are broke and frozen hungry in darkness, don't come crying to us. We told you so. In advance. Multiple times. There. Your choice.

Note: please see the Glossary if you are unfamiliar with certain words.

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