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Ayn Rand on Budget & Economy
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Government pays back borrowed money with more borrowed money
To free itself--for a while--from the limits set by reality, the government initiates a credit con game on a scale which the private manipulator could not dream of. It borrows money from you today, which is to be repaid with money it will borrow from you
tomorrow. This is known as 'deficit financing'. It is made possible by the fact that the government cuts the connection between goods and money. It issues paper money, which is issued as a claim check.
Source: The Ayn Rand Lexicon, by Harry Binswanger, p.117
, Jan 1, 1988
Inflation does not cause growth, but debases the currency
In regard to social issues, "inflation" does not mean growth, enlargement or expansion, it means an undue expansion--or improper or fraudulent expansion. The expansion of a country's currency (which cannot be perpetrated by private citizens, only by the
government) consists in palming off, as values, a stream of paper backed by nothing but promises (or hot air) and getting actual values, the citizens' goods or services, in return--until the country's wealth is drained.
A similar activity, in private performance, is the passing of checks on a non-existent bank account. But, in private performance, this is regarded as a crime--and most people understand why such an activity cannot last for long.
Today, people are
beginning to understand that the government's account is overdrawn, that a piece of paper is not the equivalent of a gold coin--and that if you attempt to falsify monetary values, you do not achieve abundance, you merely debase the currency & go bankrupt
Source: The Ayn Rand Letter III/12/1, "Moral Inflation," by Ayn Rand
, Jan 1, 1979
Inflation is plunder; would be criminal if citizens did it
Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have
ever plundered people's savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.
Source: Objectivist Newsletter, #18, "Our Protectors," by Ayn Rand
, May 1, 1962
Page last updated: Apr 30, 2021