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Are you Gullible?

Is Your Life rather too Exciting?

I feel Safer since Criminals are Not Allowed to Use Guns
What choices do you have in your approach to life? You can trust other people and politicians implicitly, you can distrust them, or you can begin by trusting them until you find them untrustworthy. This series of articles on your approach to life explores your options.

If the cynical stance explored in the last article is not the best approach to life, then does the complete opposite of being gullible give better results?

The gullible are very positive about the future. You may not know much if anything about it, but you subscribe to the view that people are generally good, they won't do anything to harm you. Being gullible will certainly get you into some exciting situations, but can have adverse rather than beneficial consequences.

Do Politicians Take Advantage of the Gullible?

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Many people are gullible. Those that blindly follow a politician's lead without thinking about the long-term consequences for either the country or even themselves are exactly that, blind followers.

You'll change your life by realizing how many people are willing, even eager to manipulate others in order to fulfill their own agenda. The high number of unemployed are victims of ostensibly sensible policies sponsored by politicians who love power, who want to be re-elected, and who don't mind how many people's lives they ruin in the process.

Do you just want a job, any job? Or would you rather become wealthy? Before voting for someone, the secret of success is to find out how much experience they have in creating wealth for themselves.

If a politician has no practical experience in creating wealth for him/herself, but has only earned a good salary or wages, how can he know which policies will create wealth for the whole country, including you?

There's No Free Lunch

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Short-term thinking will tell you that a free lunch is a great idea, and a permanent free lunch is an even better one. The negative consequences of a desire to live permanently at someone else's expense must not be that obvious. The long-term outcome of such clear self sabotage is generally ignored.

In a game of cards, if you haven't identified the patsy being fleeced, then that's you - you're the patsy! When you have a free lunch, someone somewhere will pay for it. You can change your life by realizing a permanent free lunch will need someone to pay for it permanently. In reality, there's no free lunch.

You pay for it one way or another

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White House with caption on Government Solutions
Some of the ways in which you pay are not so obvious, because opportunities which are NOT created are invisible. You lose job opportunities because the money taken in taxes from the rich cannot be used by the rich to create wealth for them and jobs for you.

Taxes increase as politicians look for ever more opportunities to purchase your vote with someone else's money. You'll change your life when you get this very basic explanation of economics and political incentives.

Taxes which initially affect only the rich at a low-level continue to go up and eventually affect everybody - including you. The US income tax began in 1913 with a top rate of only 7 percent and affected less than 1 percent of the population. Now it has grown into a nightmare affecting us all.

Inflation is neither necessary nor inevitable

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You pay through the decrease in the purchasing power of your money, general inflation, which nowadays has been euphemistically relabeled as quantitive easing. Bankers and politicians misleadingly explain that quantitive easing is to stimulate growth or to buy assets, bonds, pieces of paper from the banking system.

Yet devaluing the money is neither necessary nor inevitable. The secret of success is to understand why general inflation was zero - prices stayed broadly the same for a century - while U.S. politicians had the enforced discipline of the gold standard.

Why have house prices increased over the past several decades? Other things being equal, the value of your house hasn't changed. Its worth has stayed the same, but its price measured in dollars has increased. This distinction between worth and price is an absolutely crucial insight.

It's the money supply, the quantity issued by the central bank which increases, which means the value of the currency depreciates. Hence the nominal price of your house increases while its value - its worth - remains unchanged. Inflation causes the purchasing power of the money in your pocket to decrease.

Inflation Ends in Hyper-Inflation

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Germany knows the secret of success, it's one of the few countries that does not run a perpetual budget deficit. I'm told that German house prices have not changed in decades since their politicians don't depreciate their currency by printing money. Why not? Because Germany experienced hyper-inflation last century, and they remember the painful lesson.
One Hundred Trillion Dollar Zimbabwe Bank Note
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Inflation in Zimbabwe
Zimbabwe has just had the same lesson, observe the fourteen zeroes 100,000,000,000,000 - in the corner of the Zimbabwe bank note. Its denomination is one hundred trillion dollars! Zimbabwe's inflation lasted a few short years, a lot quicker than the US government's. But the "monetary stimulus" along with "quantitative easing" of every government are slowly having the identical effect. Ask anyone living on a fixed income which purchases less and even less each year.

Their paper currency even had an expiry date printed on it! Inflation was rampant, the value of their currency depreciated so fast that yearly inflation figures were meaningless. You needed to spend it as soon as you got it, because you knew that next week it would be worth less, if not actually be worthless.

Switzerland's money and economy are sound

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The US constitution was the starting point for Switzerland's Federation. Their many improvements entrench sound money along with limited federal power and restrictions on tax increases. Switzerland has several major ethnic groups, the devolution of power to cantons (states) ensures policies reflecting local needs, while enabling people to vote with their feet.

The Swiss Federation includes an easily implemented veto on policies implemented by government. So politicians have to sell their idea to the voters, thus eliminating misleading attempts by smooth-talking sophist politicians to implement economically ridiculous ideas. You don't get politically well connected people persuading or corrupting politicians for sleazy opportunities to gain unearned wealth.

They have the freedom to enjoy life, liberty and the pursuit of happiness. The automatic guns over the fireplace in every living-room ensure that all Swiss are well-armed, so criminals avoid potential violence and crime is low. The end result: Switzerland is one of the most peaceful and prosperous countries in the world. A very successful model for the changes the EU needs to implement.

Are politicians trustworthy?

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Politicians are professionally trained to make even the most ridiculous idea sound attractive. The more sincere they sound, the better trained they are. You'll change your life when you ask yourself is: Is anyone trying to buy my vote with someone else's money?

Yet many if not most establishment politicians pretend that quantitive easing - printing money - is a good idea, which suggests that they are either economically illiterate or untrustworthy.

So if you see a politician promising you a freebie for which someone else will pay, then run a mile. Such unsustainable promises can only end in ruin for almost everybody. Of course, he and his cohorts won't lose out, the citizens - which includes you - will pay for it eventually.

The secret of success is to ask yourself: Will this idea or this action increase - or decrease - my freedom?

Food for Thought

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"It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it."

- Dr. Thomas Sowell, Stanford University Professor, African-American economist, syndicated columnist, prolific academic author

See the origins of the US income tax in economist Dr. Dan Mitchell's article:

http://danieljmitchell.wordpress.com/2012/07/31/heres-why-the-cayman-islands-is-considering-fiscal-suicide/

 This article was originally published at goarticles.com/article/The-Gullible-Are-Positive-But-Can-Be-Deceived.-Part-5-in-the-Approach-to-Life-Series/7063405/

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