When I went to Princeton in 1969, my professors taught me that government could solve the world's problems. I believed. So did most students. It's intuitive to think that if you put the smartest people in a room and give them enough taxpayer money, they will have the best shot at fixing the country's problems. As a student, I heard nothing about an alternative.
How things have changed! In this week’s FBN show (Thurs., 10pm EST), the Cato Institute’s David Boaz and I speak before the 2011 Students for Liberty conference in Washington, D.C. – a gathering of hundreds of students who actually understand that government creates many of the problems, while freedom (personal and economic liberty) makes things better.
How exciting it was to meet all these libertarian students! I write about that in this week’s syndicated column:
Meg Patrick of George Mason University asked about the Austrian business cycle theory. How delightful to meet a student interested in that! This is Ludwig von Mises and F.A. Hayek's argument that when government inflates the money supply and holds down interest rates to create an economic boom, a bust, or recession, must follow because the prosperity is built on an artificial foundation.
Meg wanted to know if "the injection of fiscal stimulus into the economy (after the bust) disrupts the signals necessary to fix the current problem."
To which I replied: Sure does. The market is signaling that certain changes are needed, but stimulus spending interferes with those signals.
If businesses are not allowed to fail, we don't get the market feedback we need.
David Boaz added: "If you get drunk, you have a hangover. I'm sure some of you have tried the theory: just keep drinking. But you can't keep drinking forever."
[…] After spending time with those students, I feel better about the future of America.
Full column here. The show airs this Thursday at 10pm EST. Saturday and Sunday at 9pm & midnight EST.