With the permission of the Foundation for Economic Education, we present Hazlitt’s book The Inflation Crisis and How to Resolve It, for free download.
“The greater the amount of government spending, the more it depresses the economy. In so far as it is a substitute for private spending, it does nothing to “stimulate” the economy. It merely directs labor and capital into the production of less necessary goods or services at the expense of more necessary goods or services. It leads to malproduction. It tends to direct funds out of profitable capital investment and into immediate consumption.”
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Excellent!
I stumbled upon this book in a university library a couple of years ago, and have been meaning to find it again as I never got a chance to read the full thing.
The few chapters I read made it obvious that this was an outstanding, clear and concise explanation of the inflation phenomenon. I hope people circulate this one far and wide.
You guys are doing a great job with the online books, keep them coming.
Indeed!
A blogger by the name of FairEconomist made an excellent point on this issue using the funding levels of T-bills and short term CP. His point was a the Treasury created and sold more T-bills, the market flocked to them due to their comparatively safe status. THis in turn dried up the liquidity for CP of 20+ days.
The irony here? The newly minted T-bills were to create cash so that the banks can be recapitalized, the automakers bailed out etc. Therefore, by taking away their ability to raise funds in CP the Govt. have ensured the failure of those it is trying to help.
Oh the humanity…
Cheers
B
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