Says the Terminator: “This is the harsh reality and the reality that we face. Sacramento is not Washington – we cannot print our own money. We can only spend what we have.”
Source link: http://blog.mises.org/9961/what-governments-do-when-they-cant-print-money/
What Governments Do When They Can’t Print Money
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I can’t stop giggling at this. Even the governor of California, when facing a dire budget crisis comes to his senses and scales back spending. If only the same could be said about Washington…
I especially LOVE it how the opposition never fails to hitch an opportunity to grill the governor about how his proposed budget cuts will hurt their political constituents.
Guess to them the complete collapse of the state’s economy is preferable to a change of venue.
On one hand, it’s refreshing to see a politician admit to his uninformed constituents that the federal government prints money to solve it’s financial problems.
On the other hand, it sounds like he believes printing money is some kind of panacea. He seems envious, and completely oblivious to the fact that printing money has negative consequences.
Someone get this man a violin!
Actually, Arnold has repeatedly attempted to roll back the California state apparatus in fits and starts. When he was first elected, the state legislature dramatically stopped dead any of his attempts at reform, so he shifted and stuck to the ‘middle ground’ ever since, instead.
He’s a decent guy, but probably would have been better off remaining an actor and bodybuilder.
Well, some might think it’s funny, but Bill Bonner at the Daily Reckoning does not. Here’s his comments in his piece The War on Capitalism Continues on what it means if California gets a bailout:
This year, the U.S. stopped being the United States of America. Yesterday, it was reported that the states now get most of their money from the feds.
“He who pays the piper calls the tune,†is the old expression. The feds are paying the piper; the states have to dance to whatever tune they propose.
That’s the end of the federal system…the end of the system announced in the U.S. Constitution…which was a union of sovereign states. Now, it’s a fully centralized system…a popular democracy of the worse sort…in which celebrity hacks are elected and rule without any real shame or limit. Even Louis 14th, France’s Sun King…an absolute monarch…knew he was subject as well as monarch. He was God’s man on the throne of France. Now, America’s leaders answer to no one…except the mob of TV-addled voters.
The song the feds are singing is a song of higher taxes…more regulation…bigger government budgets…and huge new deficits. The War on Capitalism will cost trillions.
And Gary North points to an article that cheerfully proclaims The Worst is still to come: if you’re not petrified, you’re not paying attention!”
I’ve always thought California was stupid. Now I know. Texas, on the other hand, doesn’t have to worry about raiding the rainy day fund until the next biennium(which makes it officially the only government I know of to have a real savings account).
That’s the end of the federal system…the end of the system announced in the U.S. Constitution…which was a union of sovereign states. Now, it’s a fully centralized system…a popular democracy of the worse sort…in which celebrity hacks are elected and rule without any real shame or limit.
Bill Bonner is a little late to the party.
The United States of America ceased to exist in the mid 1800s. The military invasion of the Southern states in 1861, for no other reason than to prevent their peaceful and voluntary secession, confirmed by force of arms that the US was a “fully centralized system.”
What happens when a government can’t print money? You will learn in the next 2 weeks that the answer is to submit themselves to one that can.
Arnold should know that this country has already dealt with that harsh reality when states were given the power to print their own money. The result was the rapid devaluation and eventual collapse of the Continental Dollar.
A single central bank with the sole power to print money backed by nothing is no better either. True, it may take a little longer but the end result has and always will be the same. If the simple act of printing money made a nation more wealthy and prosperous then Zimbabwe would be the economic powerhouse now.
Arnold should know that this country has already dealt with that harsh reality when states were given the power to print their own money. The result was the rapid devaluation and eventual collapse of the Continental Dollar.
A single central bank with the sole power to print money backed by nothing is no better either. True, it may take a little longer but the end result has and always will be the same. If the simple act of printing money made a nation more wealthy and prosperous then Zimbabwe would be the economic powerhouse now.
Will “not worth a California Peso” become the new “not worth a continental”?
BTW Gary North’s article is excellent. Tomorrow may be the day of reckoning where voters finally realize that we can not tax our way out of this mess. Don’t forget, in the November election, voters passed a $19 billion dollar initiative to build a bullet train from San Francisco to Los Angeles.
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