Kneeling at the Porcelain Throne
Whether caused by over indulgence, ingestion of a toxin, or illness, vomiting is one of the methods that the body uses to heal itself. The road to recovery often starts with an unpleasant experience. As I have often described, an economic recession or economic depression is analogous to society kneeling at the porcelain throne and expelling its ills.
Sound financial health for individuals includes a steady diet of savings and prudent investments. Lured by the luxuries of easy credit, individuals and businesses became intoxicated with debt. Just as humans cannot subsist on alcohol and junk food alone, though many have tried, neither can an economy fed on leverage.
In order for the economic soul to return to financial health, the toxin of debt must be expelled. Today we see the visible signs of recovery. For those who over indulged it means losing property that one cannot afford or being denied credit from a lender. But the denial of debt either voluntarily or involuntarily allows room for the precious nutrients of savings and a healthy financial lifestyle.
Businesses that were created or expanded due to the credit drunk fest must now cut back expectations to match the wants of an individual practicing a financially sound lifestyle. Unfortunately for some, this readjustment means the temporary loss of a job. Out of despair, however, springs forth new opportunities fostered by an economy based on savings. It must be remembered that savings equates to spending in the future.
The debt grown economy also allowed governments to expand well beyond the philosophical boundaries of liberty. Billowing receipts created from debt inflated property prices, wages, and profits allowed governments at every level to expand without the inflicted pain of raising tax rates. The worst side effect of the debt cocktail was the ever intrusive state.
Either through taxation or inflation, government induced medicine for the economy robs the individual of precious savings. In reality, the doctor attempts to save himself by killing the patient.
An economic depression starves the bureaucratic monster. It is our opportunity to throw government out and return to the natural laws of liberty that guide us to unbounded prosperity.