John Stossel says when he went to Princeton in 1969, professors taught him “government could solve the world’s problems.” Now that he knows better, he’s glad to learn that some of today’s college students have a better idea about how the world really works.
Stossel discusses those students in a column posted at Human Events:
Meg Patrick of George Mason University asked about the Austrian business cycle theory. How delightful to meet a student interested in that! This is Ludwig von Mises and F.A. Hayek’s argument that when government inflates the money supply and holds down interest rates to create an economic boom, a bust, or recession, must follow because the prosperity is built on an artificial foundation.
Meg wanted to know if “the injection of fiscal stimulus into the economy (after the bust) disrupts the signals necessary to fix the current problem.”
To which I replied: Sure does. The market is signaling that certain changes are needed, but stimulus spending interferes with those signals. If businesses are not allowed to fail, we don’t get the market feedback we need.
David Boaz added: “If you get drunk, you have a hangover. I’m sure some of you have tried the theory: just keep drinking. But you can’t keep drinking forever.”
