All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation.
– John Adams
Our founders believed that educating the common citizen about the principles of sound money was essential to the maintenance of a free and self-governing society. Is it any wonder this is one of the most neglected subjects in all of public education?
I will readily admit that economics is not one of my strongest points – which is why I have started paying attention to what those who have a proven track record have to say about our current economic situation. I have also started to read Sowell, Williams, Hayek, Freidman and Hazlet. I favor the Austrian economic model simply because real world events have demonstrated it is closer to reality than the Keynesian model favored by the political Left. A case in point: the Keynesian model says, in times of economic trouble, government can “fix” the economy by spending in place of the free market. Typically, this requires deficit spending or printing of money. On the other hand, the Austrian model looks to history and says the Keynesian model has never worked in the long term. Nowhere is this point any more clear than where the printing of money is concerned. Every time this has been done, hyperinflation has followed.
First, you need to understand what hyperinflation is and how it affects a nation. The most typical example people use is that o the Weimar Republic (post WW I Germany):