This question was asked of me not that long ago. I remember it well as i was doing my best to explain the basics of Austrian economics and the failure of good ole' Lord Keynes. It was frustrating to say the least as the school system has me beat. They've been teaching Keynes for so long that his words are rooted into our system. And like a virus, his polices (vague and inept at best)have hijacked my fellow man and have apparently stopped rational thinking.
Trying to explain the system and how our money is backed by nothing more than hopes and dreams, is almost enough to make me want to spit blood. The truth is that only a handful of people (3 million or so) know that Keynes was WRONG.
But thankfully, after a few moments to compose myself, i was able to explain that if you give every person in the world a hundred thousand dollars that isn't backed by anything, then no one is really wealthier. We only dig ourselves further into our own hole. Just as in Idiocracy (which i HOPE isn't as accurate about our future as i think it is) where the smallest bills are 500000, that amount of money is virtually worthless. Unless you really want some of Carl's Jr. Extra Big Ass Tacos.
It was amazing to watch the transformation. In an instant, everything i had told her made sense. The next day, she told me of how she became involved and began to read up on Austrian economics. By the next week, she was also amazed by the ignorance of the common populous.
"No one has ever taught us Austrian economics before, or the faults of Keynes. But i'll be damned...it makes sense! So why do we keep doing this?"
I can't wait to see her reaction to how bubbles are created. I'll be sure to hold her hair back when she has to throw up.
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