The Central Planning Depression

Download PDF Version                                                                                August 17, 2019

The kind of Depression the United States is entering is permanent. There will be no free market recovery because the free market system has been replaced with central economic planning. Recessions in a free market system are short and temporary. There is no free market so there will be no recovery. So, once a recession begins an all out depression will ensue. More central economic planning will be initiated on the hope that central economic planning will generate an economic rebound. In a centrally planned economy a natural recovery will not occur.

The cause of the depression is the practice of using political power to determine economic outcomes.  All kinds of theories based on fancy statistics and presumed numerical relationships will be tried and retried. What Fantasy Free Economics does is provide the genuine reasons for economic phenomena in terms of what causes the occurrence of the statistics on which sophisticated economics rely. In mainstream economics, one number causes another. One number alone does not cause another. The cause is always explainable in terms of human behavior in just a sentence.

Americans believe government solutions not the free market system is what causes economic growth. This misguided approach is the cause of the severe depression the global economy is entering into. Widespread prosperity or even well being is not possible when the system that completely causes prosperity is eliminated. That is what has happened. The state of being in a depression will be impossible for the economy to recover from given that the only path to recovery is being rejected.

I am not saying an economic recovery is completely impossible. Even economists who call themselves free market economists are offering no free market solutions or good advice. To return to free market influences it is necessary to repeal laws, close and rein in government agencies. The practice of using legislation to rig and control markets would have to be eliminated. These things are not being done, suggested or even considered. When citizens of a country are rejecting the only available path to higher living standards, there is no where for a country to go down.

The western world understands the self correcting nature of the business cycle theory. It is out with the old and in with the new. A recession is a natural resetting when resources have become inefficiently allocated. When recessions are avoided through central economic planning, the reason and causes for the recession continue to worsen. In time, even though an economy grows to new highs in terms of GDP, the income distribution between different income classes widens and continue to widen.  This is because political power rather than price, determines who gets what in the economy. It is natural then that the wealthy become more wealthy during central economic planning because they are the ones with most of the political power.

What the United States is experiencing now is similar the situation in place within the Old Soviet Union when it finally collapsed. That is the natural outcome of a system of central economic planning. Without free market influences that type of outcome is normal. Based on our economic policies and the mentality of those who have taken charge, failure is the only possible outcome.

 

(Visited 3,655 times, 1 visits today)
5 2 votes
Article Rating

About Fantasy Free Economics

James Quillian independent scholar,free market economist,and teacher of natural law. Who is James Quillian? Certainly I am nobody special, Just a tireless academic and deep thinker. Besides that, I have broken the code with respect to economics and political science. Credentials? Nothing you would be impressed with. I am not a household name. It is hard to become famous writing that virtually no one in the country is genuinely not in touch with reality. But, if I did not do that, there would be no point in my broking the broken the code. If you read the blog, it is easy to see that there are just a few charts, no math and no quantitative analysis. That is not by accident. Given what I know, those items are completely useless. I do turn out to be highly adept at applying natural law. Natural law has predominance over any principles the social science comes up. By virtue of understanding natural law, I can debunk, in just a few sentences , any theory that calls for intervention by a government. My taking the time to understand the ins and outs of Keynes General Theory is about like expecting a chemistry student to completely grasp all that the alchemists of the middle ages thought they understood in efforts to turn base metals into goal. Keynesian theory clearly calls for complete objectivity. Government can only make political decisions. Keynesian techniques call for economic decisions. So, why go any further with that? Fantasy Free Economics is in a sense a lot like technical analysis. Technical analysis began with the premise that it was impossible to gain enough information studying fundamentals to gain a trading advantage. Study the behavior of investors instead. Unlike technical analysis, I don't use technical charts. What I understand are the incentives of different people and entities active in the economics arena. For example, there is no such thing as an incentive to serve with life in the aggregate. In the aggregate, only self interest applies. It is routinely assumed otherwise. That is highly unappealing. But, I am sorry. That is the way it is. I can accept that because I am genuinely in touch with reality. Step one in using Fantasy Free Economics is for me to understand just how little I really know. A highly credentialed economist may know 100 times what I do based on the standard dogma. Compare the knowledge each of us has compared to all there is to know and we both look like we know nothing at all. There is always more than we don't know than what we do know. I am humble enough to present myself on that basis. Why? That is the way it is. I am not bad at math. I have taught math. What I understand is when to use it and when to rely on something else. Math is useless in natural law so I don't use it. While others look at numbers, I am busy understanding the forces in nature that makes their numbers what they are. That gives me a clear advantage.
This entry was posted in Daily Comments. Bookmark the permalink.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

5 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
trackback

[…] The Central Planning Depression […]

Anonymous
Anonymous
2 years ago

A modern economy needs good producers to keep it alive and good producers need incentives, primarily wealth accumulation and quality of life. As more people see this as unobtainable the modern economy will suffer qualitatively and then quantitatively. Production of complex goods, long supply chains and maintenance of inventory systems becomes impossible as incentives dry up. Instead good producers turn to government as an upward path either through indirect or direct involvement. As it becomes more lucrative to be a bankster, lawyer, politician or lobbyist for that matter and less so to an engineer, doctor or entrepreneur, therefore government grows… Read more »

GR Pickard
2 years ago

James:
Your comments on the following: Will America’s massive debt really doom us? – USA Today

https://www.usatoday.com › story › 2019/09/22 › debt-debt-doom-america
2 days ago – In Manhattan, a giant clock displays a rising U.S. debt total — almost $23 trillion for now. Pundits say it’s big trouble. But is it?

Thanks! Chip

rlm4765
rlm4765
2 years ago

We are presently in a world governed by 7 heads called the G7: Revelation 12:3 And there was seen another sign in heaven: and behold, a great red dragon, having seven heads and ten horns, and upon his heads seven diadems. This G7 economic power structure will transition its 7 crowns to the ten horns by the midst of the tribulation: Revelation 13:1 and he stood upon the sand of the sea. And I saw a beast coming up out of the sea, having ten horns and seven heads, and on his horns ten diadems, and upon his heads names… Read more »