by Neville Kennard, veteran preaching and practising capitalist
The government, and much of the mainstream media and the establishment business interests, want to create prosperity through spending. Many economists who have gone through the conventional universities still believe in the Keynesian model of “managing” an economy. Keynes, Samuelson, Krugman, Gittins have never “got” the essence of capitalism, of Austrian Economics as propounded by von Mises, Hayek, Hoppe. Governments do “stimulus” to crank things up. They exhort the banks to lend. They are not dumb people, but they are wrong. It is not “spending and consumption” that create wealth; it is saving and investment. Duh!
Before money can be spent on consumption it needs to be earned and saved; the alternative to saving first and then spending is borrowing and spending. Then you have to pay for it later. Duh!
Spending and Consumption are what follow Saving and Investment, not what precede it. It was an over-exuberance for spending and consumption that brought on the Global Financial Crisis. People borrowed and spent. Governments (in many countries), with their big-spending ways, their corrupt central banks as monopolist issuers of legal tender, encouraged this spending.
What should be done now, today, is for governments to cut spending — their own wasteful spending. Cut it now, cut it big. Cut government departments and the regulation that holds them up.
The next thing to do, tomorrow, is privatise everything in sight; this will balance the budget quickly.
The third thing to do, the day after tomorrow, is to cut taxes; eliminate many silly little nuisance taxes, cut company tax and personal income tax to a maximum rate of 25%. A max rate of government spending (all government — Federal, State and Local) to GDP must be 30% in the first year. Then reduce by 2% a year till you get it to 25%, then I will let you go a bit slower — say 1% p.a. till you get to 20%.
At 20% Government Spending : GDP the economy will boom and people will be prosperous. It’s the economy, stupid!
And that is it. Do no more. Sit back you busybody politicians and watch the correction take place. Go on holidays. You can stay in first-class hotels, drink champagne, have talk-fests, waste the tax-payers’ money — this will be less damaging then “doing things” (and you can still save face by saying that you’re doing your own stimulus spending). Go away, do nothing, and if you really have to do something, do some undoing. Undo, de-regulate, privatise, de-tax.
People who have over-indulged go away for a De-Tox at a spa. Politicians should take themselves off to such a place for a De-Tax. Clean up body, mind and economy.
- Welcome from Neville Kennard
- Think Tanks Don't Work
- "Market Failure": Just what the government ordered!
- The Tragedy of the Tax Pool Commons
- Corporate Welfare
- Citizenship for Sale?
- I Don't Vote
- Voting: Right or Privilege?
- Stockholm Syndrome and our Love-Hate Relationship with Government
- Civil Disobedience: The Rules of Engagement
- Should Respect for Law Extend to Bad Laws?
- Jaywalking as a Demonstration of Individuality
- Government Likes War
- Collusion is Our Right
- Why Not the Drug Olympics?
- Unconventional Wisdom
- Tiger Farming: An Alternative to Extinction
- Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
- Tax Avoidance is a Patriotic Duty
- Kennard Writes to IPA Review Editor
- Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
- Separating Sport and State
- Your Home is Not an Investment
- Dick Smith, Celebrity Philanthropist
- A Libertarian's New Year's Resolution
- Extend Politicians' Holidays to Create Prosperity
- Entrepreneurs are Disruptive, and Bureaucrats Hate It
- What is a good Australian?
- Governments Like Employment But Hate Employers
- The Market Failure Industry
- Neville Kennard: The Tax Avoidance Imperative
- Wot if ...?
- The Tribal Chief and the Witch Doctor
- The Tannehills
- Democracy versus Property Rights and Prosperity
- Government Doesn't Work, and That's the Way They Like It
- Minarchy vs Anarchy
- Euthanasia and Self-Ownership
- The Right Policies to Fix a Depression
- Is Howard Our Best PM?
- Tax Producers vs Tax Consumers
- Where There's a Queue, There's a Business Opportunity
- Authoritarian Freedom
- Why Classical Liberals Should Debate Anarchocapitalists
- The Tyranny of the Majority
- If you could choose to whom you paid your tax
- Business Should Exploit Boat People
- The Immorality of Trade Unions
- "America" vs "The United States"
- Sweet Anarchy
- The Illusion of "Job Creation"
- Gold Is Money
- Guilty Capitalists
- Prosperity vs Growth
- Capitalism vs Democracy
- More people = More fun
- Self-Ownership - the very idea!
- Government will murder Neville Kennard if he doesn't back away
- The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
- Is Taxation Theft and Government a Tax Cheat?
- My Journey to Anarchy:
From political and economic agnostic to anarchocapitalist
- Government Needs Bad Guys –
that's why they like wars
- What Is Obscene?
- Traffic Economics
- Wayne Swan stands on the shoulders of other intellectual pygmies
- Neville Kennard Obituary