Future History by Sackett Jeffrey & Jeffrey Sackett

Author:Sackett, Jeffrey & Jeffrey Sackett [Gottfried, Hugo & Sackett, Jeffrey]
Language: eng
Format: epub
Tags: Reference
Publisher: Crossroad Press
Published: 2011-09-11T16:00:00+00:00

V – THE COLLAPSE OF THE AMERICAN POLITICAL SYSTEM

Government is not reason, it is not eloquence; it is force.

Like fire, it is a dangerous servant, and a fearsome master.

-George Washington

The presidential election of 1932 was the turning point in America's political history. To the Liberal Statist mentality it was the first step in the victorious march of Progressivism in the direction of Utopia. To the Libertarian Conservative mentality, it was the preliminary stone precipitating a lethal landslide: the advent of the omnipotent State.

The First Great Depression (1929-1946) began as a recession, a normal part of the business cycle. This term refers to the periodic (and inevitable) fluctuations in the economy. In a free market, goods and services (the supply) are created in response to consumer desires (the demand.) These two components can never be coordinated, not even approximately, because they are the result of hundreds of millions of consumers and hundreds of millions of suppliers interacting in the marketplace. Inevitably, supply and demand will fall temporarily out of synch. This is what is called a recession, one of the three stages of the business cycle. The business cycle can be explained by beginning at any point (which is why it is called a cycle, of course,) so we shall choose "prosperity" as the arbitrary starting point.

During a period of prosperity, demand generally outstrips supply and the suppliers expand their production in an attempt to keep up with it. Thus, production is high, consumption is high, and unemployment is low. Eventually, however, supply will outstrip demand, and inventory will begin to expand. For hypothetical example, in a time of prosperity the manufacturer of widgets56 will sell, say, a thousand widgets per month. So as not to lose sales by falling behind in production, he will manufacture twelve hundred widgets per month. The difference between what he produces and what he sells is called his inventory, i.e., unsold items he retains for future sale.

Eventually his inventory will grow so large that he will cut back on widget production. What that causes is a reduction of his work force. Widget workers become unemployed, and they no longer have disposable income for the purchasing of goods and services produced and provided by other industries. This causes those other industries to cut back on their production, which means a reduction of their work force, causing an increased reduction of consumption and thus more unemployment. This, then, is a recession: decreasing production, decreasing consumption, rising unemployment.

Eventually the inventory will be depleted and the widget manufacturer will begin to increase widget production, which means, of course, hiring back widget workers. They now have incomes with which to purchase goods and services, and this has a positive effect upon other industries. This is a period of recovery, i.e., rising production, rising consumption, and declining unemployment. Eventually the recessive conditions disappear, and prosperity returns.

This is an oversimplified description of the business cycle, to be sure. It does not include the ramifications of the growth of the service sector as

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