This is not a frivolous claim, but the sure way to destroy a prosperous nation is to debase the currency. History is full of examples, from ancient Rome to the nascent French Republic to Weimar Germany. The US and the West, fiat currency regimes all, are irrevocably destined to join this sorry club.
Sound Money Begets Spending Discipline
The siren song of unlimited money is manna from Heaven for politicians who chafe at the limits on spending required for a sound money (precious metals) standard. It may take them and their constituents awhile to realize the power they have to play God (note that I said “play” not “be” God), but eventually they succumb to the temporary adulation of the recipients of new money printed out of thin air. In short order everyone in society is a recipient of the government’s largess and it becomes impossible not only to stop but even to slow down the money printing presses.
Unleashing Unlimited Warfare and Welfare
The bulk of the new phony money is lavished on two main categories—war and welfare. In a sound money system neither is sustainable for long by itself much less both at the same time. Wars are expensive and consumers of a nation’s output, which pathetically includes young men. Welfare, once initiated, is irreversible short of total destruction of the monetary system. Like addictive drugs the recipients want more and more stimulus to achieve what appears to be a new “high”. But the monetary “high” like the drug “high” requires more and more resources to achieve what appears to be a favorable result. Like the drug “high” the monetary “high” is self destructive. The host demands and gets more and more until its entire existence is consumed in a fog of irrelevancy.
Neither war nor welfare can be “limited” as advocates for both nostrum claim. War begets reprisals and more war. Welfare demands and gets more of a nation’s real production. Not only is there is no logical place to draw the line, the productive side of the economy shrinks and shrinks. Eventually the public and international holders of a country’s debt run out of funding and the government relies on the printing press. In other words, it simply prints as much money as it needs…and its needs are insatiable. The madness ends in a Misesian “crack up boom”, a frenzy of spending on any and all vendible goods in order to shed oneself of the increasingly worthless money.
It All Started with LBJ
In America this process began in the 1960’s when President Lyndon Johnson pursued both war and welfare under his “Great Society” spending initiatives. In his memoirs Johnson admitted that he wanted to end the Vietnam War but did not know how to do so “honorably”. Thereafter mostly Republican presidents shut down the hot wars in favor of winning the Cold War, in which they succeeded. But rather than abolish NATO as “mission accomplished” after the fall of the Berlin Wall, defense spending continued to expand and new enemies were found almost everywhere. Eventually America turned its back on Russia itself rather than welcome it back into a peaceful world economy.
Welfare Corrupts All
The expansion of the welfare state became self-justifying. For example, the largess showered on “single family households” merely begot more “single family households. Today the majority of children are born into such “households”. I wonder why that is? (Yes, a rhetorical question, folks.) Did you know that one in four Americans is disabled? It’s true. One in four Americans receives some form of government disability payment. To my sorrow I have acquaintances who openly admit to applying for a stipend from one of the many programs. They readily admit not being disabled, but they justify their actions as getting some of one’s own money back, everyone is doing it, etc.
These constituents of government largess create a powerful lobby to not only continue such payments but to expand them. Those who remain outside the money circle eventually find a way to justify a new program for which they can qualify.
Macroeconomics Sounds So Scientific
Of course this entire largess is not funded out of taxes or honest borrowing. Keynesian economists have developed a new “economic science” called macroeconomics. Sounds very impressive, doesn’t it? It’s all hogwash of course, but any excuse is a good excuse for politicians to keep and win votes with money created out of thin air. It will not continue much longer, which actually is a good thing.
The “East” to the Rescue
Fortunately, the “East” never succumbed to macroeconomic science. It is poised and ready to take the lead in a new direction, which actually is a return to the tried and true old direction. It will be a hard pill to swallow, but at least there is an alternative to save most of the world’s economy.
© Patrick Barron 2026 Website
