Guest Post: Government Employees, Unions, And Bankruptcy

Wednesday, July 18, 2012
By Paul Martin

by James E. Miller
ZeroHedge.com
07/17/2012

During an economic boom, exuberance finds itself lodged in all types of industries. When profits soar, so does the public’s disregard for prudence. And as tax revenues rise, politicians can’t help but give in to their bread and butter of buying votes. Periods of accelerated economic growth typically come in two different forms. If capital is drawn from a pool of real savings to finance investment in more efficient forms of production, the boost in wages and income will be sustainable as long as consumers remain willing to purchase whatever is being produced in greater amounts. In the case of a credit-expansion boom fueled primarily by fractional reserve banking and interest rate manipulation through a central bank, the boom conditions are destined toward bust. Liquidation then becomes necessary as the bust gets underway and malinvestments come to light.

The Rest…HERE

Leave a Reply

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter