Conservatives tend to favor supply-based economies, which means that in order to drive the engine of the economy, the society produces more and higher quality goods at more competitive prices. This makes currency worth more but lowers speculation, cooling the usury cycle and reducing the power of government and commerce.
Leftists give up on that and want demand-based economies, which are closer to Communism in that they are centralized. They see increasing demand for the currency as a sign of its value, even as this devalues it because its value is based on speculation and not production, and want to encourage speculation.
In this way, we could see the two economic theories as competing visions based on location. Supply-side economics are heartland economics based on agriculture, manufacturing, and artisanship; demand-based economics are coastal economics based on international trade, finance, and debt.
In end-stage societies, the markets focus most on refinancialization, or reselling properties based on tweaking their value through a variety of methods including counting debt as assets. After all, if debt is owed, it can be seen as a valuable property for anyone who can collect what is owed.
Not surprisingly, dominance by the coastal elites tends to make society shift toward liberalization in order to allow more trade, finance, and debt, and from this we get one of the ideas of the Revolutions, which is fiat currency to drive speculation and fund top-heavy bureaucracies:
The French Revolution began at the end of the 18th century when extreme popular discontent with feudal institutions erupted into revolution, Rouanet said. The conflict reshaped the French government and led to the end of the feudal system, a hierarchical system of government that placed the king at the top, nobility and clergy below him, and peasants below all.
During the revolution, the government was bankrupt and expropriated substantial amounts of land and assets held by the Catholic Church in order to sell them. However, they were unable to sell the land fast enough to pay back creditors. To stimulate purchases, the government began issuing a paper currency called assignat. In order to prevent inflation, revolutionary officials promised to retire the assignat from circulation and burn the notes once they were used to buy property, but this commitment was not always honored, prompting public mistrust.
The root of Leftism originates in social competition and peer pressure. In coastal cities, your network of contacts matters, and that requires you to be both a relentless trend-chaser and slightly non-conformist, sort of like how when you design advertising you want your company to stand out and be exciting but not dangerous or offensive.
Bourgeois values are those of the salesperson, since this is how one makes money in coastal cities, and rely on the idea of zero obligation to anything but advancing the self economically, socially, and politically. Any questions of inner discipline, nature or gods, and goals outside the tangible are suppressed, which makes this a comforting position.
From the individualism of the coastal bourgeois urbanites, a cosmopolitan individualism arises: culture is rejected and replaced with the idea of getting ahead on a personal level and finding others who can help in this quest. For this reason, the bourgeois types tend to be atheistic, humanistic, and fond of property.
Their fondness for property takes two types: they want to own it and be rich but, if that looks unlikely, to have it supplied to them in the form of universal subsidies as if every citizen was a shareholder in the company of the state. They see the world as a financial transaction mediated by social but not cultural norms.
Consequently, over time they tend toward wanting socialist-style entitlements in the Keynesian model, since by counting national debt as an asset they can drive the economy and satisfy speculators while raising the value of properties, and eventually stumble into full socialism, with printing money as the first step:
At $8 trillion, the Fed’s stash of assets has roughly doubled since it kicked off large-scale purchases in March 2020 when the COVID-19 pandemic erupted and brought the economy to a near standstill.
“Printing money” is not literal; what they do is issue more debt in order to sustain their spending, which creates a circular Ponzi scheme that dumps money on the poor to buy products from the rich while driving up the GDP so taxes go up and government can borrow even more.
In the demand-based economics model, this seems like a good idea. More demand for currency means currency moving faster through the economy, empowering speculators and moving business on fast-forward, but it also like the assignat creates instability and eventually, loses momentum.
Supply-side economies grow more slowly and are more stable, which means that at the expense of sudden growth and currency power, instead we have currency which serves as a good reserve of value and lets people build lives outside the banks, stock market, bonds, and real estate as investments.
It seems like a simpler model but as with most realistic things, the benefit is in the long term: instead of a boom-bust cycle and a powerful bureaucracy, it offers a simpler life with less red tape and more of a chance to focus on the inner world as seen through family, culture, nature, faith, and community.
In short, happy people would prefer the supply-side model. The Left, searching for a way to justify its reckless spending, always aims it toward weaker groups, usually the poor and marginalized. This gives the Left a perceived moral superiority which justifies its spending.
However, because it is based on growth, it must always intensify, and starts leading toward pure socialism. At this point, American spending under the Left is driven by ideology instead of a perception that it will produce positive results:
Keynesianism persuaded policy makers of the benefit of beefed-up government spending via greater deficit spending, and it is largely faulted for the increase in deficits before 1980 but not for the deficit surge thereafter. Deficits over recent decades have evolved into a distorted form of Keynesianism, which the president now proudly touts as “Bidenomics.”
By explaining how deficit spending could abate recessions, Keynes gave it a laudable fiscal purpose not previously recognized. His theories also reduced the political costs of increased spending by spreading the tax burden to unfranchised future voters via federal debt.
Yet Bidenomics is no longer tethered to the Keynesians’ limited goal of full employment or even economic reality. In this administration’s view, government should use its fiscal powers to “balance the economy” in ways Keynesians avoided. Its overarching policy mantra is one that would have appalled Keynes: The sky isn’t a fiscal limit.
The massive ideological expansion of American government has produced a debt so massive that the country has almost no chance to ever pay it off. This will help vault the society into full socialism: once it has no choice but to default, it has to move its currency from the free market to government control in order to preserve some value.
In this way, the individualism of the middle class coastal city dwellers converts itself into proletariat revolution, much as the desire for landed barons to be free from European wars led them to support a middle-class revolt. Under heavy social pressure they pursued short-term options instead of thinking of long-term success.
At this point, the show is winding down. Unsustainable debt, low reproduction rate, deaths of despair, the competence crisis, and a calcified inability to think of solutions except Leftist ideology has doomed these nations. The first step on this path is the massive debt load that now entrenches them:
As the US national debt passes $33 trillion and a government shutdown looms, Wall Street feels defensive.
That shutdown could sour sentiment and deal a blow to an economy already dealing with high gas prices, autoworker strikes and elevated inflation — with some saying it could even increase the possibility of a recession.
Fitch sent Congress a wakeup call after the debt limit fight earlier this summer. The ratings agency downgraded US sovereign debt from AAA to AA+ in August, citing the nation’s mounting debt and partisan brinkmanship as the major reasons behind its decision.
With each additional increase in debt, taxes must rise in order to deal with the problem, and consequently the economy becomes less vital. This reduces the tax base while increasing costs, driving away productivity, at which point the country descends into the death spiral that supply-side economics avoids.
That means that as time goes on, the race for a nation which escapes the tax stagnation cycle accelerates, with whoever gets out from behind this disaster becoming poised to dominate world economies:
In many ways, Sweden has a higher level of economic freedom than most other nations. The Index of Economic Freedom lists all the Nordic countries ahead of the U.S., for instance. Sweden remains Europe’s leading knowledge economy. Yet high taxes still impede economic vitality, the creation of brain business jobs, and GDP growth. What sets Sweden apart from other developed economies is that it spends a high share of total economic output on government administration. By reducing bureaucracy, Sweden could reduce tax levels and, accordingly, grow its tax base.
The European case study serves as a friendly reminder for American policymakers. In the U.S., prominent tech companies have departed famous innovation hubs to establish themselves in states with lower taxes; the risk of more government intervention also looms for countries considering overseas operations.
Cooperation and institutional competition have long been key ingredients in Europe’s success. But as growth shifts to the East and South, governments in Western and Northern Europe face pressure to adopt business-friendly policies and encourage more people to pursue careers in STEM. The U.S. can learn from Europe: progress will continue largely in those locales that offer the best conditions for future growth.
Leftism leaves ruins behind it by following social pressures instead of realistic ones at every level, resulting in policies that are not just unrealistic but anti-realistic as time goes on, leading to a collision with reality which turns out to be more mathematical patterns than tangible, physical items.
Like the worst of human errors, Leftist economics always start out with a promising burst of activity but then end in total energyless repetition. However, they are popular because in groups, people favor individualism over cooperation toward a long-term goal.