Let’s examine countries that have been on the economic plan that our current administration is putting into place. Let’s go to Europe.

After World War II all the European countries were a shambles. The war had pulverized much of it manufacturing facilities. Homes had been raised by the military. Cities had been burned to the ground. People were starving.

Enter George Marshall and the United States that came to be known as The Marshall Plan. Basically we fed and clothed and put businesses back into production. – at no charge.

They did a good job of getting themselves back on their feet, but they had always had some form of monarchy, I said form. It is where the ruling class tells everyone what to do and they take care of their subjects

From their throne room they decide what is to be manufactured and where. Many of those in the throne room own the factories so they know what they can produce and who should be in charge. It works for a while. There is a need for products of any kind. The monarch then sets the price of salaries and how much taxes should be. Again it works fine as long as there is demand by the people.

Then comes a time when demand is satiated. Some people are laid off. The monarch (or whatever you want to call him) says I have to take care of my subjects so I will send them enough money each week to feed themselves. I will build some housing for them until they can find another job and be on their own again.

Have you been to Yellowstone National Park? There are signs that proclaim, “Do not feed the bears. They will become dependent on others feeding them and forget how to provide for themselves” Hmmm.

Some seek out employment and some don’t. This costs the government money which they have at this time as almost everyone is working and taxes are low but enough to run the central government. As time goes on those receiving weekly checks ask for more and better housing. The head of state feels he should provide them. Those in the throne room agree and say taxes should be increased to pay for the increasing debt.

A few years of this and those in the throne room suddenly realize there is not enough money in the treasury to pay for the benefits being given to the people so they borrow money to give away to those who “need”. This number of needy has been silently increasing.

The amount to be given away has gotten to a point where they have to borrow more and more and eventfully cannot borrow enough to pay the interest on what they need to borrow each year. No one wants to lend them money except at very high interest rates that their country cannot repay. Now what?

The European country has a central bank. It is allowed to create money that has no asset. The monarch says the people must turn in their gold and will be given the new paper money which “is as good as gold”.

This goes along fine for many years until finally no one wants to accept the paper money. Those who had their house paid for and a garden in the back were able to survive the next few stressful years. That is the history of Europe.

Shucks. I was going to write about the U.S., but I guess I’ll have to do that another time.

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