Tuesday, June 21, 2016

Increasing Tensions Between
The Public Sector & The Private Sector,
Financial Repression Will Escalate
Acting Man portrays a very somber & dire future for the developed world, as the tensions between the private sector & the public sector escalate, given increasingly challenging debts, defiits & unfunded promises/liabilities .. "For decades, politicians have made promises and increased the unfunded liabilities associated with these promises. These promises are predicated on continued growth of real wealth that can be confiscated and redistributed. In Western welfare states, people now insist that these promises be fulfilled – whether it is possible to do so or not. Since the growth of real wealth has slowed dramatically as a result of decades of intervention, politicians have resorted to borrowing more money to keep the show on the road – as inter alia evidenced by the deterioration in France’s public debt-to-GDP ratio. Central banks are supporting this growth in public debt by printing ever more money – but it should be obvious that neither the one nor the other can possibly solve the problem. It will only hamper real wealth generation even more. An enduring myth is also that it could all be fixed if only the wealth of the rich were confiscated and redistributed .. The reality that the growth of real wealth has either slowed to a crawl or even reversed is clashing with the dreamworld sold by the political class over the years in order to buy votes .. Maybe we are too pessimistic, but we see no evidence that the clash between the sclerotic political establishment and the increasingly unsatisfied electorate in many parts of the developed world is likely to bring about an increase in economic freedom or lead to implementation of more sensible economic policies. As the much-heralded “third way” (the mixture between socialism and a market economy that was supposedly going to lead to Utopia) is spiraling toward insolvency, we are more likely see increasingly violent confrontations and more and more repression in response. People have become used to the idea that the State is their sugar daddy. Many apparently believe that it has some undisclosed, infinite stash of resources at its disposal which it can shower them with at will. The reality is unfortunately different."
LINK HERE to the essay

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