The Rat Race
Because of mathematical contradictions, a central currency acts like a doomsday machine. The government is in debt because it cannot collect more than what it spent for long. Drawing money out of the system, as both President Coolidge and President Clinton did, will create a depression. The spike in stock prices is the boom before the bust.
Inflation has tragic social consequences. Within the context of the political economy, the inflation phenomenon needs a release. The mathematical aggregate is that all price inflation (profit) is the National Debt. This math drives all politics. One man's profit becomes another man's debt (the creditor vs debtor conflict.) Debt and inflation drive the demand for bigger profits and bigger wages (the owner vs worker conflict). Productivity gains and higher selling prices are the survival responses of those who produce goods (the Cost of Living increases with productivity gains). Debt and increasing overhead costs drive sales and marketing at a frantic pace. Any action that creates a profit can be justified (it takes money to make money, or slash costs - assume more debt or cut jobs). The results become either a big success or a big failure. Moral and environmental consequences of economic activity become secondary when the choice is to survive or perish. Those who manage to accumulate a surplus then invest (loan at compound interest) in response to inflation, thus driving the inflationary pressures they are hoping to escape. The existence of surplus creates the illusion of excessive wealth (the rich vs poor conflict).
With each step in the inflation progression, the values get bigger. Because money and time are linked, time becomes a liability rather than an asset. The Rat Race is the process of chasing moving numbers, but nobody can outrun inflation. The numbers grow at too fast a pace, eventually resulting in political unrest. Everyone is a loser when the social fabric tears, but the big numbers mask the real problem: inflation eats everyone alive. Interest makes the trouble with inflation worse. While a loan will help the borrower today, it makes everything worse tomorrow. Lending should never be regarded as a solution to escape inflation or to stimulate the economy.
The problems are rooted deep in the history of every nation. Debt is necessary to create money. Taxes create a need for profit. Profit creates inflation. Inflation divides the wealth, which creates the need for more lending. Debt is a secondary symptom of taxation. A central currency cannot logically be taxed. It is important to get the sequence of events correct. When politicians want businesses and government to return to profitability (surplus budgets), they are really saying that they want to return to the conditions that created the problem. They fail to recognize how the boom causes the bust. What we want is an equilibrium. For the people to be free and equal, the math must be in balance (2+2=4). Everyone needs to be debt-free, and stay debt-free, including the next generation. People need to be more important than numbers. All animosity is false reasoning.
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