Controls as Volcanic Pressure

“Controls are the most structurally damaging thing that can be done to an economy and amount to nothing more than political window dressing that allows government leaders to present the image that they are doing something constructive, when they are actually exacerbating the problem. They distort the economy by eliminating natural, and necessary, price and wage fluctuations, which respond to the allocations of resources. The end result of controls is that competitive relations are disrupted, which causes domestic shortages and a concurrent increase in demand for exports. Government intervention merely suppresses underlying wage and price pressures; it does not in any way alleviate the normal market pressures. The moment the controls are eliminated, as eventually they must be, the mounting pressures push through the surface—not unlike volcanic action—and a surge of further inflation follows.”

“We reminded the president that while nobody likes the results of inflation, everyone loves what causes it. Americans love the spending, the creation of money and purchasing power. They love government spending programs, but those programs lead to massive deficits—so we create more money to finance even larger deficits.”