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By Mr. Curmudgeon:
“The question we ask today is not whether our government is too big or too small,” said President Obama in his second inaugural address, “but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.”
The uncomfortable answer to the U.S. President’s question comes from the other side of the world. The Associated Press reports that the treasury of the Marxist African nation Zimbabwe has dwindled to the equivalent of $217 U.S. dollars. “The government finances are in a paralysis state at the present moment,” Zimbabwe’s Finance Minister Tendai Biti told the foreign press, “We are failing to meet our targets.”
According to the AP, the government of Zimbabwe is the largest employer, “with a work force of up to 300,000 – and salaries routinely account for more than 70 percent of its monthly spending,” said the AP.
Back in 2008 – ironically, the same year Obama came into office – Zimbabwe’s central bank attempted to make up for the government’s revenue shortfall by (you guessed it) printing more Zimbabwe dollars. The resulting world-record inflation rate was said by the state-owned Herald newspaper to be 2,600.2% – and that was just for the month of July. As free-market economist Milton Friedman observed, “Inflation is the one form of taxation that can be imposed without legislation.” And Zimbabwe’s inflation tax eventually robbed all her citizens of their life savings.
The Mugabe government’s answer to the crisis was to suspend its collection of inflation data. Oh, and it stopped compiling unemployment figures in 2009 – when joblessness reached 95%.
“Together we discovered that a free market only thrives when there are rules to ensure competition and fair play,” said Obama on inauguration day, “Together we resolve that a great nation must care for the vulnerable and protect its people from life’s worst hazards and misfortune.”
Funny, but Robert Mugabe has the same take on economics and the role of government. And he is determined to continue “serving” his country for another twenty-six years. You see, his government said scheduled elections – that include a referendum to change the constitution, strengthening electoral accountability and the rule of law – may have to be suspended … due to lack of funds.
Speaking of funds, South Africa’s News24 reports that Zimbabwe’s “diamond revenues were still not reaching state coffers, amid allegations that the military is funneling cash to its own pockets and that of President Robert Mugabe’s Zanu-PF party.”
I think his American counterpart would describe this as the government “investing” in the future – its future.
“Depressions and mass unemployment are not caused by the free market,” said Austrian economist Ludwig von Mises, “but by government interference in the economy.”
And you can bet your last dollar (American or Zimbabwean) that there’s a direct correlation between a nation’s lack of funds and its lack of freedom.