When an economy operates with free markets, good things are always happening but the good things are not visible. When one industry is losing income and cuts back on production, resource move to an industry that is expanding. The difficulty in the losing industry is highly visible. The emerging prosperity in the new industry is not immediately apparent so it is assumed, government intervention is necessary.

All government intervention accomplishes is to allocate resources more and more inefficiently until an economy fails to function. The negative effects of mis-allocating resources always outweigh any stimulation benefits resulting from intervention. Government solutions always cause larger economic problems down the road even when the immediate effects appear positive.

Did I say government causes recessions? Yes I did, but there is even a root cause of that. The underlying cause of  is self deception among consumers as well as professionals. People intellectually can understand the folly of trying to create prosperity through government. Unfortunately the human mind is hard wired to act on the basis that government has supernatural powers. Society looks to government to create prosperity in a way that is similar to the way kings in the Middle Ages expected alchemists could turn base metals into gold. There was a time when people almost universally believed in magic and ghosts. It took thousands of years for people to abandon these erroneous beliefs, and still they are not entirely gone. There is no telling how long it will take societies to figure out that government can’t cause prosperity.

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