The story is told that Ludwig von Mises was once asked, “Do you mean to say that the government should have done nothing during the Great Depression?” Mises responded, “I mean to say it should have started doing nothing long before that.”
I hope the story is not apocryphal, because it perfectly sums up the government’s proper role in managing the economy: none...
Of course, politicians are incapable of doing nothing when there is harm to be done, but the “stimulus” critics intrepidly insist that anything the government does will be worse than doing nothing at all.
This is certainly true. Unquestionably, doing nothing is better than borrowing nearly $800 billion from the credit markets (to be repaid through inflation and taxation) and spending it on pet political projects, from food stamps to bridge repairs to subsidies for favored energy forms...If government really wants to make it easier for people to own homes, let it give up control of money and banking, divest itself of the land it holds off the market, and generally relieve society of its endless burdens.
The biggest favor the state can do for us is to stop doing us favors!
read the entire essay
My thoughts: Corrections are necessary after booms. Trying to avoid the pain of a correction only makes things worse.
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