Armstrong Economics
Posted on January 10, 2015 by Martin Armstrong

CAPITALISM

The business cycle is critical to understand. The difference between Capitalism and Socialism is simple. Capitalism is where you are free to decide what you do with your money, and Socialism is where government orders you what to do with their money, which you earn. The difference between Communism and Socialism is clever. The former “owns” everything and the latter you own it but they tax it and if you cannot pay the tax they take it.

Socialism/Communists try desperately to paint capitalism as the benefit of the greedy rich. People see the bankers as manipulating government but this is not inherent in capitalism, that is the corruption that infects all republics. A republic ALWAYS devolves into an oligarchy, which is not freedom and is not capitalism. Russia moved from communism to oligarchy and that is why it did not really boom as did China, which moved to capitalism.

For capitalism to work historically, it must embrace freedom and that can ONLY be accomplished by a true democratic system. Once you have career politicians who are elected perpetually, that opens the door to oligarchy. If China has a political class of professional politicians who do not need money to get reelected, then this defeats the oligarchy evolution for they do not require money to maintain power.

The elections of 53BC in the Roman Republic saw interest rates double because corrupt politicians had borrowed so much money for bribing votes. This is the oligarchy tendency that destroyed the Roman Republic.

Maybe Obama’s economic “chickens” have come home to roost !

Supply and demand rules not individual countries nor companies!

The proposed system isn’t perfect but it is probably better that the mess the FED has made of the current system.

This is not as far fetched as you would think! At some point in the near future no one will lend the Federal government any more money. In 8 full years Bush added 4.9 Trillion to the debt. In 5 years and 8 months Obama added 7.2 Trillion to the national debt. On January 2001 the national debt was only 54.3% of the GDP today it is over 100% and climbing — we have been living on borrowed money since 9/11 and at some point those that have lent the money will want to be paid back!

The following re-post shows the facts and figures of what is happening in our counter as Obama and his appointed minions “Fundamentally Transform” the country into their vision of what it should be. The next result of 6 years of this has been to shift large percentages of the middle class out of the work force and its worse than what is presented here as the BLS reports do not count self employed or military jobs both of which tend to the higher side in the middle class.

The bottom line is that there are fewer and fewer jobs in the middle class which as this post suggests those people have either gone on welfare or taken early retirement. That means that few and fewer “workers” that pay taxes are going to be forced to take care of more and more people that are not working.Using BLS figures, as of last month, only 46.0% of the population of the united states was holding a job. 6 years ago that was 48.5% of the population which means that we are short at least 8.0 million jobs right now.

Obama’s Unemployment Rate Is 5.9% ~ But 5.9% Of What?: 29% Of U.S. Labor Population Out Of Work And Out Of Labor Force!.