We really are living in unprecedented times right now.  The Federal Reserve has quadrupled the adjusted monetary base over the last 5 years.  Yet we haven’t seen high price inflation due to low velocity and a huge increase in excess reserves held by banks.

There was a severe recession in 2008.  There were severe misallocations that needed to be corrected.  Unfortunately, since that time, the Fed and the government have done almost everything to make it worse.  It lessened the blow of the recession then, but it has caused even bigger distortions.  The government continues to spend well over $3.5 trillion per year.  Add in the trillions by state and local governments and a huge chunk of capital is being sucked up and misallocated.  It is a huge waste of resources.  In addition, the onerous regulations hurt productivity even further and make us that much poorer.

This all needs to shake out.  Austrian school economists often get criticized because some people perceive their views as pessimistic.  But Austrians are just trying to be realistic.  It is not that Austrians want a recession and a lower standard of living.  It is just that Austrians will point out the inevitable.  When the government spends vast amounts of money and the central bank creates huge amounts of money out of thin air, there are going to be major distortions in the market and there are going to be consequences that people don’t like.

While I don’t really like making predictions, I do have a sense of what might happen over the next 10 years or so.  It is impossible to predict with certainty.  One major point that Austrian economics teaches is that economics is based on human action.  We cannot predict with certainty how humans will act in the future.  Perhaps Bernanke and the other Fed members will wake up tomorrow morning and decide that all monetary inflation should stop.  Perhaps Congress and Obama will decide we need massive spending cuts and a balanced budget.

Of course, we can make strong assumptions that it will not play out this way.  So I am only offering what I think is a probable scenario for the next 10 years.

At some point, I think we will be faced with another recession.  Perhaps it will play out similarly to 2008.  But regardless of whether it is more mild or worse than 2008, I expect the Fed will step in one last time.  We will see more monetary inflation.  The Fed will try its best to prop up housing and prop up the overall economy.  Of course, it will also take care of its number one mission, which is to save the big banks.

I think we will eventually see a point where consumer prices go up.  The Fed has been playing the Goldilocks game of not too hot and not too cold.  While they say they want the banks to lend, in actuality they are quite happy with the banks not lending too much right now.  If the banks started lending more and lowering their excess reserves, then price inflation would pick up quickly.

But at some point, I expect to see a surge in price inflation.  We will likely see higher gold prices.  We will probably see higher oil prices.  The Fed will continue to walk a tightrope, but it will eventually run out of line to walk on.  We will eventually get a scenario where price inflation is high (maybe 10%) and the economy is still struggling with high unemployment and stagnant growth.

The Fed will eventually have to choose between more monetary inflation (and risking hyperinflation) or stopping monetary inflation (and allowing a severe recession).  I think the Fed will ultimately stop short of hyperinflation.  They will not want to lose the U.S. dollar’s status as the world’s reserve currency.  They would lose complete credibility if we saw price inflation jump completely out of control.

Eventually, we will see a major shakeout.  The Fed will stop its monetary inflation, except perhaps to save the big banks.  If the Fed has to choose between keeping the big banks afloat and buying government debt, it will choose in favor of the banks.  Congress will be forced to cut back its spending dramatically.  There will be no one to buy the government’s debt at low rates.

Overall, I think things will play out somewhat similarly to the 1970s and early 1980s.  Of course, as the saying goes, history never repeats, but it does often rhyme.  I think this time will be far worse than the 1970s.  Perhaps the price inflation rate will not be worse, but I expect the temporary drop in living standards to be far more severe.  I don’t think most people are prepared for what is coming their way.

I say all of this not to be pessimistic.  I am just being realistic.  The Fed can’t quadruple the monetary base in 5 years without there being severe consequences.  In addition, we will be faced with baby boomers hitting retirement age and unfunded liabilities of hundreds of trillions of dollars.  People are going to be forced to work harder and longer than they expected.

I think we will eventually see better times ahead, but it is going to be a bumpy road to get there.  You should be prepared, especially mentally.

The George Zimmerman trial is about to wrap up.  He is being charged with murdering Trayvon Martin.  It is mainly a question of whether Zimmerman acted in self defense.  I would be surprised if Zimmerman is convicted, but you can never be certain with who is on the jury.

This is an extremely divisive case.  I think a slight majority of Americans side with Zimmerman, at least to the point that he should not be convicted on murder charges.  Personally, I think there never would have been a trial if politics and the media had not entered into it.  Zimmerman was only later arrested and prosecuted after the incident became well known and the illustrious Obama spoke (note the sarcasm).

For those who are against Zimmerman and believe he should be convicted, I find that there are two main reasons for this opinion.  One reason is racial.  If Zimmerman were black or Martin had been white, then most people wouldn’t care about what happened and it wouldn’t be on the news.

But not everyone against Zimmerman is black and not everyone against him necessarily thinks that Zimmerman is some kind of a racist or bigot.  The second main reason that people oppose Zimmerman is because they view him as taking the law into his own hands.

Some people will say that Zimmerman was the aggressor because he followed Martin and got out of his car.  We can have a legitimate argument about whether this was poor judgement on Zimmerman’s part, but poor judgement does not make him a murderer.  I could go walking down the street in the ghetto in the middle of the night.  It would be poor judgement on my part whether I am looking for a fight or not.  But if someone comes up to me and physically attacks me, then I have the right to defend myself, regardless of my poor judgement of walking in a rough neighborhood.

For those who oppose Zimmerman and think he should be convicted because he got out of his car, I pose a serious question.  What if George Zimmerman had been an undercover cop?  Would you still believe that he should be convicted of murder?  If not, why is there a difference?  Do you think a government-issued license (a police badge) should change the verdict?

My guess is that most people, even those who currently oppose Zimmerman, would think that an undercover cop should not be convicted if the same exact scenario had happened.  I believe these people are hypocrites for thinking this way.  They are not being consistent.  Zimmerman was carrying a gun legally.  But the people who oppose Zimmerman mostly think that the state should have a monopoly on violence.  Most people who oppose Zimmerman do not believe “regular” citizens should be able to carry guns. (I am generalizing here and I know there are exceptions.)

So if Zimmerman had been a police officer, even if undercover, then attitudes would be different right now among many people.  But since he didn’t have a state-issued badge, he is on trial for murder, despite the injuries he sustained.  If Zimmerman had to do it all over again, I’m guessing he wouldn’t have left his car.  He is now faced with a life in prison or a life in hiding, despite the evidence that he most likely acted in self defense.  But regardless of whether he used poor judgement in leaving his car, it doesn’t make him guilty of murder.

Minutes from the FOMC meeting in June 2013 were released, showing a split in policymakers’ opinions on the timing of halting the Fed’s latest asset buying program (QE).  Here are some questions that should be asked of the Fed, particularly by Congress, but probably won’t be asked.

1) If the Federal Reserve stops buying government bonds, who will buy the government’s newly issued debt?  Will private investors pick up the slack?  Will foreign governments such as China and Japan add to their holdings?  Will interest rates rise?  Will Congress be forced to cut spending?

2) If the Fed stops buying mortgage-backed securities, will the big banks be stable?  Since last September, the Fed has been buying about $40 billion per month in mortgage securities, which is essentially a bank bailout.  Will the big banks now be able to survive without further Fed subsidies?

3) If the economy can barely grow with the Fed adding to the monetary base at a rate of about $1 trillion per year, what will happen when the Fed stops inflating?  Will the economy continue to grow?  Will there be any kind of a correction?

4) What happens if the economy starts to sink back into recession?  Will the Fed start another QE program, or will it let the economy sink?

5) What if the commercial banks decide to start loaning out more money and reducing their excess reserves?  Will the Fed allow this?  Will there be massive price inflation?  Will the Fed increase reserve requirements to prevent the banks from lending?

6) What are the consequences of allowing the QE program to continue?  What are the downsides?  Does this cause distortions in the marketplace?

7) What will the Fed do if long-term interest rates continue to rise?  At what point would the Fed step in and increase its buying of government debt?  Would the Fed allow interest rates to rise to 10% or above?

8) If the Fed believes it is doing a good job of managing the U.S. dollar, would Fed policymakers oppose legislation to allow competing currencies developed from the free market?

I don’t expect most of these questions to be asked, at least not directly to Bernanke and other Fed officials.  And I am in no way suggesting that the Fed should step in if interest rates rise, if there is a recession, etc.  In fact, I believe that the Fed should stop all monetary inflation immediately.  I am only pointing out that the Fed has had an unprecedented loose monetary policy over the last 5 years, yet the economy isn’t showing any signs of booming, except perhaps the stock market.  It is scary to think of how much malinvestment there is in the system and how bad the shakeout will be when the Fed does slow down or stop its monetary inflation.

I really don’t think that Bernanke and the Fed know what to do.  Bernanke knows what to do in the sense that he will be retiring in January, but he will be leaving a messy situation for someone else to deal with.

I think we will eventually have to go through some kind of a deep recession/ depression for a major reallocation of resources.  It is going to be painful.  The Fed can only cover it up with monetary inflation for so long.  I don’t think the Fed will risk hyperinflation.  At some point, it will stop buying government debt and essentially tell Congress that it is their problem.  Congress will have to cut spending.  The Fed may still have to bail out the big banks, but it will help the banks over Congress if it is a choice between one or the other.

In conclusion, I think gold and cash (digits) are the best investments right now.  Gold is your best hedge against inflation and cash is your best hedge against a major recession.

On June 15, 2013, I wrote a post about whole life insurance.  Robert Murphy, who is an advocate of the Infinite Banking Concept (IBC), responded to my critique.  In particular, he addressed the notion that buying whole life insurance is mixing two different goals.

In his post, Murphy used an analogy with real estate.  He asks the rhetorical question of whether buying a home is always a bad financial move because it is mixing goals.  Those two goals are investing in real estate and getting a place to live.

I don’t necessarily think that purchasing a house is a good analogy to purchasing whole life insurance, but I get his overall point.  Personally, I try to explain to people that a house is a consumer good if you are going to live in it.  If you are going to choose between living in a million dollar house on the beach or a $90,000 condo somewhere else, you would be better off financially if you bought the condo in most cases.  Or you might be better off renting.  Obviously this wouldn’t have been true if you bought in the year 2000 and sold it in 2006.  But generally speaking, you are better off paying less for a place to live, at least from a financial perspective, in most cases where there isn’t huge appreciation happening.

This isn’t to say that you should always look to buy a cheaper place to live in or to rent.  But you should buy something for the right reasons.  If you want a house on the beach and you can afford it, then maybe that is the best use of your money to bring you pleasure.  But it is not necessarily the best financial decision.  Many people stretch themselves to buy a place that has more space or is in a safer location, but it isn’t necessarily the best move in terms of money management.

Of course, there are many reasons to buy a house that wouldn’t apply to buying a whole life insurance policy.  In buying a house, you don’t have to worry about getting kicked out by a landlord.  You can make changes to the house according to your own desires.  You can also get a fixed payment, which would actually be a financial benefit to buying over renting.  Also, in certain times, you might be able to get mortgage payments (plus taxes) that are cheaper than you would pay for rent in a comparable place.

I do think there is one strong comparison between buying a house and buying whole life insurance.  I also think this is one of the few good reasons to buy a whole life policy.  Both are essentially forced savings plans. (I use the term “forced” in a way different from referring to government force.  This does not involve violence, as you are making a decision in which you are essentially forcing yourself to do something to avoid default.)

If you buy a house with a typical mortgage, then a small part of your payment each month is going to paying down the principal balance on your loan.  As time goes on, the amount that goes toward principal gets bigger and bigger.  Eventually, you will pay off your house and not have to worry about a mortgage payment any longer as long as you keep living there.  There are some older people who are terrible savers, yet have their house paid off.  They would probably have a net worth of close to zero if they had never bought a house.

When you buy whole life insurance, you are essentially forcing yourself to save money each month by directing it towards the policy.  It is easy to say that you should buy term insurance and invest the difference, but a lot of people do not have the self-discipline to set aside that extra money.  It can almost be seen as the equivalent of allowing too much withholding tax during the year so that you won’t owe any taxes when it comes time to file.  You give the government a loan just to make sure that you are not irresponsible with the money that should be earmarked for paying your taxes.

With all of that said, my biggest concern with whole life insurance is still that many people will get ripped off.  When people mix their goals in buying a house, they generally understand the numbers and they understand what they are doing (although we did see some bad judgement back in the days of the housing bubble).  I’m not sure that I can say the same for a whole life insurance policy.  This isn’t a sarcastic comment when I say that you almost need a PhD in economics just to understand everything in it.  It is conflating the goals of life insurance and investing and it makes it quite difficult to understand what kind of a benefit you are getting and how much your rate of return really is going to be.

For this reason, I would generally recommend that people stay away from whole life insurance, unless you are really thorough and you can understand the terms and the numbers without confusion.  So while I won’t make a claim that you are a complete idiot if you buy whole life insurance, I would caution most people to stay away from it unless you really understand what you are getting in to.  If there is any confusion on your part, you are probably getting ripped off.

In conclusion, I think most people are better off buying term life insurance.  Perhaps there are some good whole life policies that would be good for certain people.  But I fear that the people who would benefit the most, due to a lack of self-discipline, are also the people who would be least likely to understand the fine details.

Also, as a side note, just because I may have some disagreements with Robert Murphy and others on investment/ money management issues, it doesn’t mean that we disagree on libertarianism.  We can both push for a dramatically smaller state (or no state at all) and still have disagreements about money management.  Neither one of us would hold a gun to your head and tell you that you have to buy a certain type of insurance policy.

I was walking through Best Buy the other day, marveling at the technology.  Not only was I fascinated with the size and clarity of the televisions, I was also impressed at the prices.

I bought a 27-inch Sony television about 14 years ago.  I paid about $400 for it.  The thing was a beast.  For $400 today, you could buy at least a 39-inch television.  Perhaps you could do even better with a sale.  But you are also getting an HD tv that has a flat panel.  It would weigh a fraction of that Sony tv I bought 14 years ago.

So as far as televisions, you can get far more for your dollar today.  Prices are cheaper and the quality is far better.  And that is in the face of inflation over the last 14 years.  According to the BLS’s CPI inflation calculator, prices have risen by 40%.  So, on the conservative side, prices have gone up 40%, while prices of televisions have fallen dramatically, with far better quality.

Although there is no major industry that is not heavily regulated by the government, it is not surprising that electronics and technology are regulated far less than other industries.  Of course, Best Buy, Apple, and all of the other companies are subject to the same massive taxes and business regulations.  But aside from this, electronics are not heavily regulated relatively speaking.

Meanwhile, in industries that are heavily regulated, it is no surprise that prices rise at a fast pace (usually faster than the stated CPI) and the quality does not get much better.  In some cases, the quality even diminishes.  I speak of industries such as education and healthcare that are heavily regulated and funded by government at all levels.

Imagine if education were more like the electronics industry.  Imagine that we saw new innovations that allow children to learn better.  (Ironically, the one bright spot of education is coming from the advancement in technology.)  Imagine if prices went down, even in higher education.  Imagine being able to choose different levels of education and different styles of learning, while having price competition.

Healthcare and medicine have even more potential if given a relatively free market environment.  We wouldn’t have doctors all graduating with basically the same curriculum.  We would see competition and innovation.  We would see new technology advance quickly, while actually seeing a reduction in prices.  We would have doctors trying various techniques, with those most successful likely being rewarded the most.  We would see doctors actually trying to help their patients with things such as diet, instead of just throwing pills at patients to benefit the pharmaceutical industry.

In conclusion, we should advocate and hope for a more free market in every industry.  We should also hope for more price deflation.  Our standard of living has improved vastly with things like televisions, smartphones, tablets, and computers.  There is no reason that we should not also benefit from better products and cheaper prices in other industries.

The most significant financial story of the last week, and perhaps of the last month, is the rising interest rates.  The 10-year yield went up significantly on Friday, closing at about 2.71%.

To put this in perspective, this is still very low by historical standards.  It is still lower than it was just a few years ago.  It is far higher than its recent lows (around 1.5%).

I think the most relevant part of this story is largely symbolic up to this point.  Sure, interest rates have an effect on investments and savings and they certainly affect the mortgage rates.  But it is not as if we have seen a crash of the bond market or something else big.  I think the reaction (or lack of) by the defenders of the establishment is the biggest story right now.

I am not sure if the people at the Federal Reserve and their defenders understand how vulnerable the economy is right now.  I think those at the very top do understand, at least to some degree, that something isn’t right in the world.

When defenders of the free market warn about the extremely loose monetary policy of the last 5 years (at least in terms of the monetary base), defenders of the establishment will point to various things.  They will say that price inflation is low.  They will say that growth is picking up, but we just need more Fed stimulus to ensure a full recovery.  They will also cite statistics.  They will also say that the debt doesn’t matter, as long as we continue to grow.

When establishment economists make predictions, they often use certain assumptions for their predictions.  This includes a certain rate of growth for the economy, when in actuality they have no idea what it will be.  They also make assumptions about future interest rates.  The assumptions are typically that they will stay low.

The last few weeks have disrupted these assumptions.  If interest rates go up, it all of a sudden changes a lot of variables.  The Fed’s balance sheet goes down in value.  Interest payments on government debt will start to go up, particularly on newly issued debt.

I think the short-term upswing in interest rates will slow down.  It is not surprising that rates would go up after being at near all-time lows.  I don’t think we will see much higher rates until we see a pick up in price inflation.  Perhaps the rising interest rates are indicating a coming change in price inflation, but we can’t be certain.

The one thing that the last few weeks has shown with the rise in interest rates, is that there really is no free lunch here.  Defenders of the establishment think that we can just create trillions of dollars out of thin air and have interest rates near zero and not suffer any major consequences.  They promote the idea that there is a free lunch in the form of low interest rates.  But aside from the fact that this hurts savers and discourages savings, it also can’t last forever.

There is a giant misallocation of resources that needs to be corrected.  I would suspect that part of this correction would mean higher interest rates, although it is quite possible that it could be the opposite, depending on how long the Fed continues to inflate.  But the Fed should stop the digital printing presses and interest rates should be set by the marketplace.  As long as there is major interference from the Fed (and the government), then resources will continue to be used in ways that are not in accordance with consumer demand.  This means less productivity and an overall lower standard of living.

There are many radical libertarians (and I use that term as a compliment) who do not favor celebrating the 4th of July.  Since America is no longer a free country, they see no point in celebrating Independence Day.  They see it as phony.

I agree with the sentiment that America is not a free country.  It is not a land of liberty.  The government, at all levels, takes about half of our money.  Virtually every aspect of our lives is regulated.  And the American empire is all over the world, imposing its will all over the globe.  So America is not the land of the free.  Compared to North Korea, we are free.  But there is not a lot of freedom in the world today.

I don’t think it is a good strategy to act like Scrooge on the 4th of July.  It will probably just turn people off of your message, who want to enjoy some time off work with their friends and family.

Instead, I see it as an opportunity to educate those with an open mind.  You can gently remind people that Independence Day is really Secession Day.  The colonists seceded (declared independence) from Great Britain.  What Edward Snowden has done today is nothing compared to what the colonists did back in the 1770’s.  Snowden is not trying to overthrow the government or even lead a secession movement that I know of.  He is simply trying to point out criminal activity and wrongdoing inside the government.

The 4th of July is also a good time to point out that the taxes that the colonists did not like were a fraction of what we pay today.  Aside from slavery, the colonists, under the king, were a free people compared to what we are today.  The colonists rebelled for far less tyranny than what we suffer from today.

For radical libertarians, the 4th of July also offers an opportunity to speak about the Constitution.  Americans would be far better off if the federal government followed the Constitution under its original intent.  The size and scope of government would be a fraction of the size.  We would be far freer.  But with that said, the Constitution itself centralized power.  It replaced the Articles of Confederation, which left the national government with very little in the way of power.  So from that aspect, the Constitution took away our liberty.

I think it is also important to remember that America has never truly been free.  Every time in history has had some kind of violation of individual rights.  There was obviously the issue of slavery until the 1860’s, and there were still racial issues for far longer, imposed mainly by southern state governments.  And while there was certainly more economic freedom in the past, it has never been perfect.  There were high protective tariffs in the 1800’s.  There were regulations to favor those with government connections.  There has always been corruption.  But, we do have to admit that the welfare state and the American empire are far bigger today than at almost any other time in American history.

I hope you enjoy your July 4th, even with the realization that you don’t live in a free country.  But you still have the freedom to speak in most cases, so you should use that to speak to others with an open mind.  For the others, just let them be.

I was recently in a grocery store in a middle class neighborhood.  I had to go to the customer service desk.  I realized the other people in line were all waiting to buy lottery tickets.  Some of them were buying what seemed like a large number of lottery tickets.  It was far more than one or two.

I’m guessing some of these same people clamor for the government to protect them from terrorists.  Their odds of being struck by a terrorist are about the same as winning the lotto.  It is virtually zero.

For most of these people, this is their only hope for the future.  It is sad to see.  I’m sure most of them work hard for their money and yet they are squandering it on lotto tickets.  They are trying to hit a home run that will never come.  They know they have no hope of becoming wealthy unless they win the lotto.  It is a self-fulfilling prophecy.

It is actually a sad state of affairs in America right now.  And it is better in America than it is in Europe and parts of Asia.  The American middle class is struggling.  We have these new great technologies with smart phones, tablets, big screen televisions, and so on, yet, at the same time, living standards are declining in many ways.

Life is expensive.  This is the cost of big government in terms of government spending and government regulations.  It is at all levels of government, but particularly bad at the national level.  Health insurance and medical care are ridiculously expensive.  This is the cost of bureaucracy.  In real terms, wages are going down for many people.  And that is for the people who are fortunate enough to have jobs.

It is very difficult to save money these days.  How can you save money when the government is trying to take so much of it?  Americans are struggling to fund any kind of retirement, let alone build up enough of a cushion for an emergency account.  The majority of Americans are living paycheck to paycheck, or something close to it.

There is not a lot of hope and optimism in the air.  Perhaps there may be some young people out there entering adulthood who are looking to take on the world.  While I think it is great to see, I fear that many of these people will have their hopes shattered once they hit the real world.

Aside from technology, living standards may actually be declining for middle class America.  The only way to reverse this trend is to get big government off of our backs.  I hope that most Americans will soon realize that they are far poorer than they need to be.  They are the victims of an establishment that has tricked them into believing that they need big government to survive.  Yet, the opposite is true.

The only way we can achieve a society with greater liberty and less government is through education.  To be clear, this is not about formal education, but about people understanding the benefits and morality of a libertarian society.

The only way that a government can have significant power is if a majority of the people consent to it.  The people don’t have to go out and be cheerleaders for the state, but they have to at least be tolerant of the state.  Most people have gripes about the government in some fashion, but most will also admit that we need government.  And these are not just minarchists who think we need a government that only protects life and property and enforces contracts.  These are people who generally accept state-run education, Social Security, and various other government programs.

If a majority of people no longer consent to the state, then it will not last for long, regardless of elections.  In the U.S., there are over 300 million people.  There are only 535 members of Congress.  Even if we count all of the government employees, it is still a fraction of the total population.  And it is safe to say that a lot of government employees are not there because they love government but because they found a job that pays them money.

I think there has already been a shift in the thinking of many Americans.  I think it is for a combination of reasons.  The last two Ron Paul presidential campaigns and the internet are the biggest reasons.  Another contributing factor is the bad economy, coupled with long and wasteful wars.  With all of these things combined, there are more libertarians today than there probably ever have been in history.

The libertarian crowd is still small relative to the population.  There are not nearly enough people to drastically reduce the size and scope of government.  But the increasing numbers are having an effect, even if it is hard to see.  A good percentage of the new libertarian crowd is young adults.  They tend to have a more open mind, they get much of their news from the internet, and they can be influenced easier.  There are younger people I have met who turned into libertarians within months.

It is important to remember that most people will not be transformed overnight.  Most won’t even be transformed over the course of several months.  You never know what discussion or article or book might be a trigger for someone to open their mind and explore and start the journey.

I think it is important to not go for any home runs.  You are not likely to ever persuade someone to become a hardcore libertarian with one or two discussions.  The person may say he agrees with you, but you know deep down he does not feel as strongly about a certain issue as you do.

In most instances, the best you can hope for is to chip away at someone’s beliefs.  You have to remain consistent and principled in your own beliefs.  If you are having a discussion with someone and you don’t remain consistent, he will likely see it, whether he challenges you on it or not.  The best thing you can do is to make him think and make him want to do more research on his own time.  There are rarely instant conversions.

Even if you pull off a miracle and have an instant conversion with somebody, he will probably not be a very good representative of libertarian theory at that point.  He would still have to go through the education process.  If you have been reading libertarian literature for years now, there is probably a lot you take for granted.  Think about all of the brainwashing that must be reversed.  Think of all of the history lessons that must be retaught.  Think of all of the economics that must be corrected.

I have also suggested in the past that you don’t try to convert family members.  It is probably the hardest thing to do.  You will likely get frustrated.  Your family members know your faults and will likely see your political stance as a fault.  If a family member wants to argue about politics with you, the best way to convert the person may be to have them read a particular article or book.  At least they will see someone else as the authority on the matter and not you.

In conclusion, you can do your part in getting a more libertarian society by helping to educate others.  This doesn’t mean being pushy or getting into arguments.  It means helping people open their minds.  It means chipping away at their long-held belief that we need government.  You will not hit home runs.  You must take small steps and let each person take the journey on their own time.

The younger people in America (and this likely goes for many parts of the world) are getting ripped off.  They are being taken advantage of by the older people.  Older people know how to vote and influence their so-called representatives in Congress.  This isn’t to say that older people aren’t getting ripped off by the government too.  But as far as wealth being redistributed, after the government and the lobbyists, the older generation is next in line for the plunder.

It is hard to define the specific age groups.  Certainly anyone under 40 is getting ripped off.  I would venture to say that anyone under 50 is too.  Somebody who is 50 years old right now is probably not going to see Social Security and Medicare until at least the age of 70, and I even find that doubtful.

There is nothing in the Social Security trust fund except IOUs.  It is part of the national debt.  Even if those IOUs were good, there would still be a massive shortfall.  And then there is the other, even more massive unfunded liability, called Medicare.  There is no possible way that the program can be sustained anywhere close to its current form.

Working people have to pay taxes to fund wars, pay foreign dictators, provide subsidies to rich farmers, fund all of the bureaucrats who make their lives more difficult, and then pay for the retirement of tens of millions of people on top of it.  Meanwhile, all of the money that is taken from them as part of the payroll taxes is spent immediately.  None of it is saved.

I know of young people who are withdrawing money from their 401k plans because that is the only money they have in reserve.  Many people don’t even have this option because if their 401k plan is with their current employer, they likely cannot take any kind of a withdrawal.  The best you can do is to take a loan and pay yourself back.

Working people are taking on a huge burden.  They are barely scraping by.  It is very difficult to raise a family on a middle class income.  About the only major subsidy you get is for education and the schools are so bad that many parents (and rightly so in my opinion) don’t even use the government schools that they are forced to pay for.

Not only are working people just barely getting by, but they are finding it difficult to fund any kind of a retirement.  Most people are lucky to get a 401k, which is vulnerable not only to market fluctuations, but also the government trying to tax it more in the future.  The thought of retirement seems almost like a fantasy for most people who are under the age of 50.

Meanwhile, these same working people have to pay for senior citizens to play golf and travel.  Many seniors today have company pensions, which aren’t nearly as available to younger people today, except perhaps government workers.  Again, good luck with your 401k plan.

At some point, I think the workers are going to shrug.  It is not to say they will stop working or disappear a la John Galt.  I think the younger people in America are going to realize they are getting ripped off and they will take a stand.  They will no longer feel any sense of guilt or obligation to fund the retirement of the older generation.

At some point, there will be a congressman who stands up and says he is going to cut payroll taxes and lower the so-called benefits of Medicare and Social Security.  Others will see that this is not political suicide.  The younger people will start to demand this of their so-called representatives.  At some point, there will be a major shift.

The major divide in the future of America will not be between Republicans and Democrats.  It will be between young and old.  The young people will eventually get fed up with working hard and seeing few results.  They will get tired of seeing the older people living the good life at their expense, while they have little to look forward to.  The workers outnumber the retirees.  The workers will eventually figure this out and win.