Why Governments Have No Incentive to Help You

We live in a fascinating time in world history, a time when most people around the world seem to believe their governments are their friends.

Bullion.Directory precious metals analysis 24 October, 2024
By Peter Reagan
Financial Market Strategist at Birch Gold Group

And that’s a strange concept in thinking, historically speaking.

Throughout most of world history, governments were in place to concentrate power into the hands of the few. Citizens, by and large, were resources to be used for the government’s purposes. As taxpayers and foot soldiers to finance and defend the government. Just consider the Roman empire, the feudal systems of the Middle Ages, and our current world with North Korea, China and many other countries who put “survival of the state” above “survival of citizens.”

Here in the West, most think their modern, democratic governments are different.

Sometimes, they are.

All too often, though, government’s good intentions deteriorate. And we find, once again, the majority deprived for the benefit of the few.

Yes, even in the West.

We’ve come a long way

To be fair, here in the West, we do have more freedom and personal autonomy than serfs in feudal Europe had. We have a better standard of living, too – clean water, plenty of food, faster transportation.

We can choose where to live, choose what type of job that we want to work, and choose how we use our free time.

Of course, most people make little use of the choices that we have, and even fewer make full use of them to take full control of their lives. (We’ll get to that later, though.)

These days, most people more or less trust the government to make big decisions for them.

That’s a mistake. Not only do governments make terrible decisions for individuals. It’s that governments have no incentive to take care of you (at least not after you’ve voted for them).

After they have your vote, their incentives are to get more votes to stay in office. The illusion that the elected politician is working for your best interest is what’s important.

For example, Daniel Lacalle put it this way in the context of inflation:

Many citizens want more government control of the economy to curb rising prices. It is the worst strategy imaginable. Interventionist governments never reduce consumer prices because they benefit from inflation, dissolving their political spending commitments in a constantly depreciated currency. Inflation is the perfect hidden tax. 

That’s right, what is actually the best solution for citizens is the worst solution for the government in general.

To get elected, politicians promise things to get votes. Then, they pay for those things largely by printing money. Well, printing money is free, right? Everybody likes more money!

The economically illiterate (let’s face it, most of the population) think they’re getting free gifts from the government. In fact, we’re ALL paying for that free gift. Thanks to inflation, “the perfect hidden tax.”

Again, from Lacalle:

[Government] presents itself as the solution to rising prices with subsidies in an increasingly worthless currency. That is why socialism and hyperinflation go hand in hand.

“Socialism” here means increased government intervention in markets – price controls, for example.

And, aside from government control, what are socialist governments known for? Propaganda. Gaslighting. Trying to fool their citizens into thinking that it’s anything but the government’s fault that the economy is deteriorating. Because the government’s on YOUR side! That’s why they’re going after price-gouging grocery stores, evil oil companies and fat-cat homebuilders. That’s why Vladimir Putin is still to blame for high gas prices two years later.

Kind of like we’ve been hearing from the White House for the last few years…

How to reverse the trend

There actually is a way that the government could help us. It’s really simple, too!

Lacalle explains:

If you want lower prices, you need to give less economic power to the government, not more. Only free markets, competition, and open economies help decrease consumer prices. 

Yes, the government can help the most by staying out of it.

Now, maybe you’re one of the people who, on reading that, exclaim, “But we live in a free market capitalist society! Why aren’t prices lower and things better?”

And that’s a great question to ask.

Many readers might think that we currently have a free market with competitive and open economies, but the reality is that we live in increasingly intervened and overregulated nations where central banks and governments work to perpetuate unsustainable public deficits and debt.

Just stop to think about how many permits, zoning issues, environmental impact statements, parking studies, licenses, and other regulatory hoops that you have to jump through to start a corner store. It’s absurd.

On the other hand, you must also consider just how many jobs all those regulations create! Municipal surveyors, city councils, architects, planning commissions, biologists, transportation consultants (yes, it’s a real job!), countless lawyers and low-level bureaucrats… Hundreds of people go to work every day, benefiting from the miles and miles of red tape.

The net result of all that red tape, though? It limits innovation. It stifles economic growth. Bureaucracy acts like a parking brake on wealth creation.

So the government solution to stagnant economic growth? You already know! More regulations. More committees, more bureaucrats and more intervention. All these additional jobs are financed by more debt – fuelling inflation and depressing economic growth at the same time.

The government cares more about growth of power than economic growth.

Who’s looking out for your best interests?

Despite all of the nonsense and garbage legislation and flood of regulations coming out of the White House, you can declare independence from government meddling.

It’s a choice you have to make for yourself! No elected official is ever going to tell you what I’m about to – because elected officials messed it up in the first place.

In Forbes, Nathan Lewis explains how things used to be:

For most of U.S. history – 1789 to 1971, a period of 182 years – the United States embraced the idea of a currency that is stable, reliable, and definite. In practice, this meant a currency whose value was linked to gold, the best real-world way to achieve these goals.  

So what? Well, consider this:

The result was that the U.S. became the wealthiest country in the world…

Alan Greenspan agrees, calling those 182 years:

…a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation.

But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. 

Diversify your savings with inflation-resistant, tangible assets that have always had intrinsic value: Physical precious metals. Owning physical gold and silver gives you a sturdy foundation on which you can build a secure financial future.

Gold and silver are immune to the “perfect hidden tax” of inflation. And in times of crisis, demand for riskless tangible assets soars.

We can’t return everyone to “a period of extraordinary global prosperity” – but each and every one of us can put ourselves on a personal gold standard.

Open a Precious Metals IRA today to diversify with funds you’ve already saved, or learn more about our services.

Remember – the government’s best solutions just make the problem worse. it’s up to you to take the first step on the path to financial freedom.

This article was originally published here

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