This from the Market Oracle
http://www.marketoracle.co.uk/Article15372.htmlThe system is going to break. The ability of Washington to send out checks to everybody to whom it promised checks is going to fail. The checks will not be sent out, or else they will not be for money that will buy much. The Federal government is going to default in some form. I believe that it is likely to default by raising taxes on existing workers and simultaneously cutting benefits to beneficiaries. This may be cuts in the income of existing beneficiaries, of whom I am an obvious case, or it may be a delay of the advent of the benefits to those who been promised the benefits. The retirement age for Social Security may be raised, or perhaps there will be some system of means-testing for Medicare recipients. But, in some form, there is going to be a default.
We are on the cusp of a political transformation. The technology is on our side. The communications system is on our side. Articulate and even inarticulate critics of the existing political system have the ability to spread their message of discontent as never before in the history of man. The fundamental political fact of our era is an escalating crisis in legitimacy for the Establishment.
As the crisis of the economy becomes more obvious to more people, and as it becomes obvious that the government and the central bank are unable to reverse the effects of the previous Keynesian policies, the public is going to withdraw legitimacy from the central government.
No one has a comprehensive plan to reform the system. This is a good thing. The system is too complex. The whole idea of Hayek's spontaneous order is that no central-planning agency can assemble the information necessary to plan. No system of sanctions could enforce it anyway.
To do this, we have to begin to develop alternatives that can be used to substitute for the shutdown of each government boondoggle. We can't expect to beat something with nothing. Our job is to criticize existing system, but it is also to encourage the development of privately funded alternatives.
We are seeing the crisis of legitimacy at exactly the time that we are seeing a crisis of the economic system. The main justification for the expansion of government power has not been the spread of democracy, or the spread of the American way of life, but rather the predictable expansion of the economy year after year. Economic growth has been the holy grail of every Keynesian government in the world. It has also been the holy grail of every socialist government in the world. This goal is now being called into question by the fiscal and monetary policies that the Keynesians have imposed on the public, all in the name of higher per capita income. The unemployment rate keeps going up. This is the soft underbelly of every incumbent government.
Here is my slogan for political reform: Replacement, not capture; then de-funding.
Let us take this slogan and begin to apply it to all the government institutions that we deal with on a regular basis. Apply it especially to the Federal government.
Overnight political revolutions always centralize power. That is what Frederick Engels taught, and that is what I believe. What I believe is best for the country is a quiet social revolution, which is marked by a shift of reliance away from all government money toward free-market and charitable funding. We will simply walk away from the system. When enough people walk away from the system, and the rest of them lose their shirts when the system goes belly-up, we will be in a position to have a real revolution, one in favor of freedom.
This revolution will be one of decentralization and some form of operational secession. I don't think states are actually going to break away from the union. I believe that the governors and mayors are not going to bother to get Federal grants, because the money is either not available or won't buy anything. When we get to that stage, we will be prepared for a new period of liberty. That day is coming. The government has shot his wad, and the Federal Reserve, in shooting whatever wad it has left, is going to debase the currency.