Rob Viglione

Less Negativity, More Inflation

Trying to keep the party going indefinitely puts everyone at risk, particularly those who had nothing to do with our present state of over-leverage. This nonsense of privatizing gains and socializing losses inequitably rewards risk takers and punishes the prudent.

The government should let reality sink in for those who put themselves at risk and enable the prudent to allocate savings in ways they feel make sense, such as buying distressed assets that hold promise. Government seizure and allocation of resources operates on the assumption that public officials are better capable of allocating savings than the savers.

Government bailout programs, and fiscal stimulus packages effectively redirect private resources in ways that public officials deem appropriate. Why is this assumed to be more efficient than allowing those who have demonstrated the capability to execute productive activities (earn money) and save (demonstrate prudence) the freedom to allocate their own resources in ways that make sense to them?

In this way savers are rewarded for their prudence when markets crumble. They can pick up discounted assets imprudent risk-takers are forced to liquidate. This natural bail-out mechanism.is the only equitable option, and is far more efficient. Enabling the productive and prudent of society to make decisions with their own resources for which they, alone, must bear the consequences ensures significantly greater circumspection. It also means that society is making lots of smaller investment decisions, versus massive, unilateral decisions from the top down. One mistake can bring us all down!