Further, most people and businesses have a fairly hard time borrowing today, which is probably a good idea. (Why do you think “AngelNetworks” and VCs are so important to new businesses? Banks don’t loan unless they are fairly sure they will be paid, which should have been the idea.)

In a Republic with a freemarket system, the economy goes where economic forces take it, in this case, to deleveraging and deflation. Had these trends been allowed to proceed, it would have been less painful, but here we are.

Market-based banks would resemble private banking (think the Medicis and the Fuggers in early modernity) or hawalas in the Dar-al-Islam. People don’t lightly entrust money, absent strong personal relationships, without statutory protection.

That is why the market-based reform of SNLs was such a failure. That’s why assuming “markets” shape bank policy is deeply debatable.

To get to anywhere near what the Framers and Ratifiers intended in 1787, we may need to have a leader who is leery of where Federalism has led in teh last 100 years.

Remember: Investors don’t count as savers, they are spenders (they are buying something (partial ownership of a business, or of a business’ debt) rather than ‘saving’ cash).

As for retirees, you have to remember that most of today’s retirement-instruments are investments, not cash-basis savings. Those things increase in value under inflation, and decrease in value under deflation.

So a ‘hard dollar’ policy is what actually punishes the majority of seniors.

‘The rules’ of the market place have been ‘never hold cash’ for DECADES now – this isn’t new…

As for rates on BANK ACCOUNTS that is a separate issue, and is 100% market-driven.

The MAJORITY of consumers want SPENDING ACCOUNTS not SAVINGS ACCOUNTS. That is, they want FREE BANK SERVICES instead of HIGH INTEREST RATES.

Since there is no demand for true savings accounts – high interest, high service fees, minimum balance required and limited funds availability – most banks do not offer them,.

That’s life in a free market – if no one else wants a specific product, it probably won’t be available.

Even if people STOPPED using debt today (Which would essentially require Sharia-style usury laws & penalties), the EXISTING debt still has to be paid off.

The Average American owes at least 150k, against a salary of just under 50k.

There is nothing you can do, at all, to make a deflationary economy work in this environment.

So we simply have to accept 2-3% perpetual inflation, with wages rising, prices rising, and the 2% who buck the system & save money paying the economic price (loss of savings value) for their contrarianisim.

We are in a dillima here: There are 2 groups – an overwhelming majority with massive fixed-rate debt, or significant equity investments, or both, and an extremely tiny minority of economic non-participants with hoards of cash stuffed in various recycled containers.

In this case, the ONLY viable course of action in a Republic, is to adopt the policy that will NOT ruin the economic lives of the majority with debt and/or investments…

Even if it hurts the minority who love to count their cash every day.

Economics should NOT be used for social engineering – policy should follow the market choices of the people, not try to herd them into ‘right thinking’ activities.

And the people have spoken with their wallets, demanding credit and inflation.

So that is what we will have. Forever and ever.

And we won’t become cave-dwellers, either…

Although it will be nice to see the hogs who have been pumping up the gold-bubble & fear-mongering hyperinflation get slaughtered by the market, after Romney wins & the economy starts to recover (utilizing the massive supply of cheap money made available by the Fed)….

They aren’t all hippies, and they aren’t all willing to stay peaceful forever, when it comes to their goal of destroying the nation known as ‘The United States’ and returning us to the confederacy of 1777.

There is a very, very strong ‘We will force you to be free, because it’s for your own good’ attitude among the less pacifistic of the bunch…

And given how violently destructive Paul’s ideology would be in today’s credit-driven society, it would take an authoritarian government to impose it…

being smart enough to sieze an opportunity

That is sometimes called “taking advantage of a situation.” Not illegal, not even immoral, but also not exactly an admirable trait in many situations.

Completely appropriate in a war, however. Are we at war among ourselves?

As for your “how can you?” question, I believe in reality. What will be, will be. That doesn’t mean that it will be the best outcome, but it will be the outcome. Or it might be the best.

But my support or non-support rests on a lot more than this narrow issue, as basic as it may be.

I normally don’t like to judge who is more “electable” and who is less, but in this case I can make an exception. Paul would lose in a landslide of Goldwater proportions against Obama.

There is a difference between being smart enough to sieze an opportunity and forcing something on people for theri own good.

Please read this: http://mises.org/daily/3788. It is a nice over-view for people who do not know (or do not understand) the history involved.

“And Austrian Economics has been dead and buried for years ? with each swipe of a credit-card or signature on a loan document adding another shovel on the grave”

Yeah, the credit card economy worked SO WELL . . . . (Are you joking? I have to ask. Do you NOT see how 2008 demonstrates the building a society on a bulwark of debt DOES NOT WORK?)

“The entire Austrian economic position is based on an economy that?s basically run like a Dave Ramsey book. No debt, substantial individual savings, and limited possessions ? thus a huge personal stock in the value of the currency. Think bad-old-monarchical Europe.

“The exact economic opposite of America.”

Yes, since after WWII, when there were welfare factors that allowed this to work (briefly, through about 1974, when the bill came due).

Before that, through most of the Republic’s history, when there was real growth, the economy was “basically run like a Dave Ramsey book. No debt, substantial individual savings, and limited possessions ? thus a huge personal stock in the value of the currency.” If you think that there is any way to avoid cave-dwelling that does not involve a return to those things, well, good luck with that.

We are going back to being a country of free men, free markets and free pulpits, not because of Ron Paul or any other individual, but because that is what is sustainable. To say that people will hate that is to state the obvious. To say that we need to pick leaders that understand that is to acknowledge that “that which is simple is not simply seen.”

If Paul do this, more power to him.

Brent Tweed, the Ron Paul supporter who was elected chairman of the Republican State Convention on May 5 at the Augusta Civic Center said ?If Republicans at the national convention are looking for cheerleaders, they won?t find them with Ron Paul supporters. ?I put Mitt Romney in the same category as Obama,? he said. ?I?m going to be bold here. Obama winning?and I don?t like Obama?is better than Romney winning.?

http://www.themainewire.com/2012/05/leader-ron-paul-convention-takeover-obama-romney/

Why do I call ‘liberty’ people authoritarians?

Because like most utopian movements (Communisim being the most recent example), they are VERY, VERY willing to use force – in the case of the Paul folks, force of law so far – to build their utopia.

Examples:
Anyone who opposes ‘LibertyLand’ must be stomped out…..

It’s OK to subvert the will of the voters ‘for their own good’ (convention-jacking)….

If elected, the use of the powers of office to economically destroy anyone who doesn’t live a ‘proper’ life according to the Paul ideology (this means anyone with significant personal or commercial debt).

Plans to gut institutions that generally oppose the Paul ideology (Military, CIA, law enforcement).

And so on…

They’re all for ‘freedom’ and ‘liberty’ unless it’s the freedom to tell them we’re not buying what they’re selling…

Then we need to have it forced on us for our own good.

Sound familiar?

You see, while the Paul backers & their economic fellow travelers have been raging against the Federal Reserve, the argument FOR their position was LOST in the stores, car dealerships, and real-estate offices of America.

It’s not government debt, or central banking that made it IMPOSSIBLE for Austrian economics to hold sway in the US.

IT’S CONSUMER DEBT, SPENDING, AND A REFUSAL TO SAVE

The entire Austrian economic position is based on an economy that’s basically run like a Dave Ramsey book. No debt, substantial individual savings, and limited possessions – thus a huge personal stock in the value of the currency. Think bad-old-monarchical Europe.

The exact economic opposite of America.

The reason your argument that deflation may be needed makes no sense in the actual American economy, is that almost NONE of the American people HAVE ANY MONEY – and thus they are actually HURT when the value of money goes UP.

In a society where SPENDING is the rule, CREDIT is king, and saving is for oddball-paranoids & old folks (the general ‘joe public’ way-it-is in America), DEFLATION – not INFLATION – is a problem.

You see, in such an economy INFLATION reduces the value of money and fixed-rate debt, and INCREASES the value of personal property.

Since NO ONE HAS MONEY for more than 2 weeks to a month, no one cares that it’s value goes down slightly over the course of a year…

However, EVERYONE has lots of posessions – and they generally LIKE inflation raising the value of those things relative to the money they spent to buy them.

Thus, there is a perpetual demand for INFLATION in the American economy.

To contrast, DEFLATION – which you say ‘may be neccicary’ increases the value of something NO ONE HAS ANY OF…

While reducing the value of THINGS PEOPLE ACTUALLY OWN.

That’s why Austrian economics – completely divorced from Paulistinian Revolutionary crap – can never be used to guide the US Economy…

It’s 100% contrary to the market choices the American people have made – because it’s 100% incompatible with an economy where all personal and business spending is based on CREDIT.

I wasn’t even aware that had happened. I hope the Paulindromes don’t prove to again be sore losers, but you never know.

They might be even worse as winners.

In 2008, Paul went off in a snit and refused to campaign for McCain or encourage his supporters to vote McCain.

In some other sites’ various interchanges with Paulites, I have found they are adamantly in a Paulornobody frame of mind, and their leader has to break that devotion and show them the idea is to DEFEAT obama and not “send a message” to Reps. because they did not choose Ron Paul.

…they were written to administer a convention of like-minded people trying to reach mostly compatible goals. As with Islamic extremists, that isn?t the situation for the Paulistinians. They?ll play within the letter of the rules, but not within the spirit.

The rules as they are now are based on the concept that if agreement can’t be reached quickly, like-minded delegates with a variety of ideas can work out their differences and come to some agreement that will aid in the common goal–electing a Republican President. It’s designed to work if sentiment is somewhat evenly split among multiple candidates, with none of them far ahead of the group.

If too large a contingent is set in advance to nominate a man who has been rejected soundly by the vast majority of the party population, one who has never even garnered a plurality in any representative poll, that doesn’t advance the goal. An honest assessment of the campaign so far is that Ron Paul is the second choice of almost nobody. He is either a first choice or a last choice–there is little sentiment in between. For him to win the nomination by fiat would be a travesty and a subversion of the process.

My hope is that it doesn’t come to that. If it does, regardless of the outcome, it could easily be fatal to the party. Is that the goal? I don’t know.

I say all that and I also say I don’t dislike the guy. I think his love of our country is unquestioned. He just shouldn’t be our candidate.