Why It's Not 'Time for Helicopter Ben to Drop Some Money on Main Street'

Chris | InformationLiberation
Sep. 09, 2010

Ellen Brown wrote an article recently called "Time for Helicopter Ben to Drop Some Money on Main Street." In it she argues the government should print money in a bunch of fancy ways to bailout main street and to "reverse deflation." Arguing the specific points is not my intent as the entire premise is what I take issue with.

The most fundamental thing to understand about economics is the printing of money does not create wealth. It creates more piece of paper, that's it. If society started from square one with only a printing press for "money," then society would have nothing. The printing of money creates no wealth, all it does is redistribute wealth.

It takes the wealth which the productive created through actual work of value and redistributes it to the people with the printing press and the cronies which they choose to give handouts too. Who they give the money to is irrelevant because it's inherently an act of counterfeiting and theft.

The imaginary threat of "deflation" means prices going down because the value of the money is going up. We do not have deflation, we have people dropping prices because of the government caused recession, "deflation" is nothing more than an excuse to cause inflation (print money for cronies). If you don't want prices to fall relative to your income, by all means live in fear of the threat of deflation. If you like low prices then you should run from anyone who tells you deflation is going to kill us all.

The problem is fundamentally one of the government running the most important part of our economy -- the production of currency. Consider it currency communism. A free currency market would be based on gold, perhaps silver, perhaps some other precious metals as well, because they're the most suitable element on planet earth to be used as currency. Dividing them does not diminish their value, they cannot be printed at will, they have a fixed weight and are easily malleable, and they store huge amounts of value in very little weight. That's why they've been the market's money of choice for thousands of years.

The only reason we have a paper standard now is because of government fraud taking us off the gold standard completely. It could not have been done from square one, because no one would accept paper as a representation of value right off the bat, it had to be done with paper as a representation of gold, which is a store of value because at the time it was the most highly salable good (I.E. everyone was willing to buy it because of it's value as a medium of exchange. Apples for example would rot and make for a poor currency.).

As a result of this crazy new world where currency is something printed by government at will, all sorts of crazy theories have been created by "economists," most of them employed directly by the Federal Reserve, who will spout all sorts of nonsensical theories about how the government should go about printing money, who it should be given to, how much to print, where to spend it, and all sorts of other socialist central planning nonsense like you'd hear out of some Soviet meeting at central command. They're all complete nonsense which merely serve to justify the Fed's existence and it's nationalization of the currency market.

The ultimate bailout of main street would be to shut down the Fed entirely and let free market money take its place. Be it e-Gold or some other fully backed commodity currency. That would take away the government's power to steal from the productive secretly through inflation and it would prevent the government from being able to fund all the wars and socialist schemes it currently does through printing money. Just giving the government the power to print money instead of the Fed would change nothing.
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Chris is an anarcho-capitalist and voluntarist who runs the website InformationLiberation.com, you can contact him here. You can read more of his commentary here. If you want to learn more about real economics, read/watch our Introduction to Austrian Economics.