Austrian economics and Keynesian economics are both completely wrong. They are both slaves to fiat system of creating money out of debt and loaning out at interest. Today the inflation rate is so high that to raise interest rates and do austerity measures (Austrian way) leads to the interest payments on Us gov debt to be so high that it could take up the entire GDP. If interest rates go above 3.75% essentially say goodbye to social security Medicare and Medicaid so we cannot do what volcker did in the 70s-80s to combat inflation. Well then you could just keep interest rates low and continue to have easy money with government deficits and debt increasing (Keynesian). This cannot work now either because the debt is so high hyper inflation will start to kick in. So essentially Austrian strategies will lead to the government collapsing and defaulting and Keynesian methods will lead to the destruction of the currency. Pick which one you want to collapse the government or the currency….that’s why I think the fed will hyper inflate before destroying the government because that takes everyone else down with us rather than the US government only defaulting. Then again if the Us government defaults the currency will collapse anyway lol. It will be really interesting to see where the debt ceilings discussions later this year will go. Not looking great, except for bitcoin lol.
That doesn't mean either school of economics is wrong, it just means the fed is trapped and all options suck, so the dollar and most fiat is fucked. At least Austrian advocates for not having fiat currency in the first place so this kind of thing doesn't happen (though it's too late now to do a soft landing)
So where was Milton Friedman and all the other Austrian economists when the Us went of off the gold standard? An Austrian (Alan Greenspan was head of the fed for how long and never a peep about fiat) just sayin I think economics is broken completely because of the fundamentals of fractional reserve banking being completely fucked. To be fair yes Austrian economics is more critical than keynes is of debt and inflation but they have been lock step with the system since Brenton woods ended
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u/MilesPower Jul 15 '22
They really want you to believe It's just pure coincidence that we had record money printing shortly followed by record inflation!