Tuesday, June 14, 2011

Productivity increases, and prices increase? Thanks government

The internet has made the world magnificently more productive than what it was in the past. Things that used to take hours or days, or even minutes (like sending a fax) can now be done in mere seconds. You can have a face to face meeting with someone halfway around the world without any travel. Access a libraries worth of information in seconds, find that law reference instantaneously, etc. It is great. Typically as productivity increases prices decrease, as something becomes less costly to produce the less is charged for that service. So why has there really not been any noticeable deflation in most areas of the economy? The answer of course is the federal reserve and the government. They have systematically stolen all of the wealth created by higher levels of productivity. This has been done through tax increases, and inflation of the dollar supply.

I get depressed when I see the state of the world. The fact that people think it takes two people working to make ends meet in this day and age, where one person can produce as much value as three or four people in the past because of increases in technology that make us all more productive. However, because if the liars and thieves in government, more people are working and working longer than ever and to what end? To support a larger, more bloated more inefficient government.

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