|
|
|
|
by Fred E. Foldvary
| Mon, 9 Mar 2009 |
A Pure Free Market Would Quickly Revive the Economy
Suppose that instead of their massive spending, bailouts, and subsidies, governments at all levels declared a state of freedom. Suppose the government chiefs acknowledged that it was government intervention that crashed the economy, so the remedy would be a pure free market.
In this libertarian dream world, governments would in one swoop abolish all taxes and restrictions on incomes, sales, and produced goods. Instead of interventionist governmental law, the market would be governed by the natural laws of supply and demand.
Without the burden of taxation, labor would be much cheaper to hire, so firms would hire unemployed workers. Labor would be able to keep its full wage, so workers would spend more on goods or pay off debt. Minimum wage laws would be swept away, so low-skilled workers would get jobs, too. With no sales taxes, goods would be cheaper, and more would be bought.
In a pure free market, there are no restrictions or taxes on peaceful and honest human action. With no permits and license requirements, enterprises would fill empty shops and houses. There would be no zoning, so folks could set up business in their homes. If they had no money, people would trade goods and services.
The Federal Reserve would cease to expand the money supply. Instead there would be free-market banking, with banks issuing their own currency. It would now be legal to use private gold and silver coins for transactions. Local currencies would spring up to supply funds for a credit-starved economy.
Laws prohibiting and penalizing fraud would still apply, but federal deposit insurance would be gone, so savers would be careful about where they put their money. Government agencies that are supposed to safeguard the financial industry would cease to operate. They offer false protection anyway, as we have seen with the recent Ponzi schemes that left investors naked as the financial tide went out. People would protect themselves with services that check on the soundness of banks, brokerage firms, and insurance companies.
No longer propped up by governmental bailouts and subsidies, failing banks, insurance companies, and brokerage firms would declare bankruptcy. Their operations and assets would be sold to other firms. Car companies would be bankrupt, but they would still have valuable factories and skilled workers. With lower costs and untaxed profits, these assets would be bought up by other firms.
The retired who depend on government for medical care and social security income would continue to receive those benefits, but the funds would no longer come from taxes on labor. With no income tax, employers would no longer have a tax advantage in paying for medical care. People would buy their own medical insurance and, thus, would be able to just buy inexpensive catastrophic insurance. Those suffering from cancer would be able to take medical marijuana and now-banned treatments. The market would provide the variety and levels of treatment most preferred by the customers.
Most of local governance would shift to private and contractual communities such as homeowners' associations. Members would pay dues and assessments for services such as streets and security. These communities would form higher level associations that would pay for wider scope services such as highways, which would charge tolls to eliminate congestion.
With no governmental funding, schools would be financed from tuition paid by parents or corporate sponsors. College students would get funds from working, loans, and scholarships. Competition for students would reduce waste while raising the quality of education.
The state and federal governments would obtain revenues based on benefits rather than extracted by force. Those who pollute the public's resources would have to pay dumping charges. Private communities and local governments would pay the state and federal governments for their protective and judicial services.
In a pure free market, the economy would thrive because doing business would have much lower costs and much greater rewards. People want to work and produce, but barriers imposed by government stop them. All that is really needed to get the economy going again is to stop interfering with what folks want to do.
|
|
|
