Wednesday, June 27, 2012

Prime Minister Manmohan Singh is Going to Put Us All into More Troubles

Recently prime minister mr. manmohan singh said that, 'India cannot expect "outside help"  on a scale on which can see the country through its difficulties'. I am not sure what kind of "outside help" prime minister was expecting but after looking at the immediate steps which his government is gong to take to supposedly revive the sagging Indian economy, it becomes clear that those steps are going to result in more disaster and more troubles for all of us. Instead of making things better, these steps will further worsen the problems and put the economy under more heavy stress. Let us take a look at what these steps are and how they are going to do further damage to already slowing Indian economy.

While returning from Rio+20 (phony) climate summit, manmohan singh said, "we must plan our economy in such a manner that we cannot expect outside help on a scale which can see us through our difficulties ". Carefully read the emphasized word: plan our economy. This means, Mr. singh wants to implement the same policies which got us into this troubles in the first place! The present economic mess is a result of government's central planning only. The central planning authority which is in control of the supply of money - the central bank RBI - is solely responsible for inflation and the boom-bust cycles. Their manipulation of the market rate of interest via loose monetary policy - i.e., endless money creation out of thin air via printing presses - is the root cause of price rise and the business cycle. They created an artificial boom in many sectors of the Indian economy which is now bursting. The economy is under recessionary situation because it is trying to liquidate all those unhealthy boom time mal-investments. It will be a pure absurdity to put RBI in charge of economic recovery! People need to realize that RBI is the wolf in sheep's cloth. It will be a height of lunacy to expect RBI thugs to safeguard our lives!

Years of historical experiences and sound economic theory has shown us time and again that central planning can never work. As Ludwig von Mises said, economic calculation is impossible for the socialist central planning agency. Hayek pointed out that government central planning can never replace the individual's planning of his own life. Only an individual has the knowledge regarding his value rankings. No matter how hard the government central planning agency tries, they can never gather that knowledge of individual value rankings; it is an impossibility. Despite this, prime minister singh is still insisting for more central planning. He still wants to micro manage the complex economy about which he is totally ignorant.

Some of the steps which his government announced are also counterproductive e.g., allowing commercial enterprises to borrow more money from outside, offering government bonds to NRIs and a possible rate cut by the RBI. First, it does not make any sense that the problems which are caused by borrowings (debt) in the first place are somehow going to be cured by more external borrowings! It also doesn't make any sense that NRIs buying government bonds is going to solve any problems. It is a known fact that government is a pure consumption sector - a parasite - which squanders society's wealth. NRIs money will be similarly consumed and wasted by the profligate wasteful government officials. That much amount of private wealth will not be available for the private sector of Indian economy. That will retard economic progress further! And a further rate cut by the RBI will only add more fire in already highly inflationary Indian economy. It will create more artificial booms which surely will bust in future.

All these steps of singh government is only going to further exacerbate our problems. People must clearly understand one thing, that as long as the State is present, nothing will change for better. As long as government is intervening in the economy, things cannot improve. As long as government is meddling with our lives, we cannot live peacefully.  Situation can only improve when the State become extinct.

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