2.7.4 Emergency Spending
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| Emergency Spending |
In
response to this charge, the following observations and alternative approaches
can be discussed. There may be some initial benefit to being able to flex the
amount of money and spend it for emergency projects, however the medium to long
term effects of this are inflation and a transfer of wealth from the masses to
the elites. The additional money that is injected into the system does not
initially effect the general level of prices and the early acquirers of this ‘new
money’ can reap the benefits of this money before the negative effects by way
of reducing the purchasing power of money (inflation) reaches the wider
society. The initial acquirers are usually large corporate interest groups that
can sell goods such as arms to governments and then convert the proceeds into
assets other than cash ahead of the inflation that will reach the society. The
people that deal in cash and loans are usually the masses and they are the ones
that are hit by the decline in the purchasing power of money once inflation
sets in. As a result, it is a hidden tax levied upon the majority of people
that deal more with cash and bank deposits. It is no surprise why governments
like the Fiat model along with the special interest groups they represent - not
to mention the banks that charge interest on money that was not earned and was
created out of nothing.
Secondly,
the need for such funding is often as a result of the capitalist states
instigating wars as an economic strategy to increase growth and economic
prosperity for their economies. Hence the slogan: “war is good for the
economy”. Can it then be said that emergency spending such as this would be a
significant factor if this utilitarian view were abolished?
