Austrian Economics and war financing

Discussion in 'Economics' started by Daal, Jul 16, 2009.

  1. Daal

    Daal

    Lets say Ron Paul is president and there is a war in US soil, the treasury market tanks a lot and treasury actions start to fail by the leaps and bounds. How is he going to raise funds to pay for the war?Or are they cowards and dont want to admit they will have to run the printing press given that at certain levels of taxation, tax revenues would stop rising as evasion, weak growth and other problems would became widespread
     
  2. Nattdog

    Nattdog

    they would have to raise taxes directly rather than surreptitiously through inflation. quandary solved.
     
  3. Daal

    Daal

    What if tea parties, offshore evasion, massive unemployment happens?The laffer curve exists when you are talking about extremes, at a 90% income tax rate I bet you the government wont be raising much in tax
     
  4. The Government has lots of assets it could sell or lease. Its called privatization.

    Selling bonds or leases against hard assets like The Grand Canyon or Yellowstone is within Paul's philosophy.
    He would expect to be payed in gold.
     
  5. Nattdog

    Nattdog

    "What if tea parties, offshore evasion, massive unemployment happens?The laffer curve exists when you are talking about extremes, at a 90% income tax rate I bet you the government wont be raising much in tax"

    If the government fails to win the support of the people and is unable to raise enough wealth from society to win the war, then the war will be lost.

    This is true regardless of the method of financing.
     
  6. Daal

    Daal

    People can 'support' the war and yet not be willing to pay for it, no one likes to be taxed
     
  7. fhl

    fhl


    How nice of you to admit it anonymously in a chat room when your liberal friends in gov't are too cowardly to do so.
     
  8. Nattdog

    Nattdog

    Well, that seems to be splitting hairs. if someone is not willing to pay for something that requires financial support it counts for nothing.

    What the inflation does do, and in this you are correct, is make the process of war funding less democratic. In converts straitforward taxation that the public can understand into "inflation" the bogeyman the public has very little understanding of, either causes or cures.
     
  9. Daal

    Daal


    Therefore allows the government do choose the least damaging path by inflating prices instead of allowing widespread destruction of human life and capital goods. The printing press can be an instrument of higher living standards, at least on a relative/comparative basis
     
  10. aegis

    aegis

    Only in the short-run.
     
    #10     Jul 16, 2009