How Government Creates Wealth


The  image above shows reveals how most governments inefficiently waste our tax dollars.  It does not even count the wealth that goes uncreated due to regulations and restrictions.  

We’ll probably never know to what extent of our potential wealth goes uncreated but if you know at least one guy who really wanted to be a Barber but couldn’t afford the $19,000 licensing and education requirements, then you know it happens.

Then there is the additional step after the government takes 25% where they create “quantitative easing” on their 25% turning it into 40% before spending it, and THEN redistributing.  That’s how it can claim it has “created” wealth.

Unfortunately this quantitative easing makes all of your dollars lose value due to inflation. The Federal Reserve AIMs for 2% inflation every year. This means if you have $100,000 saved up for retirement, in only 10 years, it’s lost 20% of its value and it has the purchasing power of now only $80,000.

You are probably thinking, “Wow, that sucks! Where is my incentive to save up a large retirement nest egg?”

I will remind you that this is the AIM and STATED GOAL of the Federal Reserve. And it works great when you have a government with a spending problem. When the government actually gets around to paying off our debt (if ever ) they get to pay it off with heavily-inflated, lesser-valued dollars.

A true wealth-creating society depends on savings which is invested into innovation and growth.

Check this video out and see why only he principles of Limited Government and Free Markets can begin to change the current economic course we are on.

Tom Woods Liberty Classroom

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