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Chapter 3: The Choice is Ours to Make

Austrians oppose the Federal Reserve’s policy of
keeping interest rates artificially low because they
believe that growth stems from savings and investing,
and the artificially low rates discourage savings.
Keynesians, on the other hand, believe that low-interest
rates will encourage demand because “as long as we
can manage demand—we can manage the economy.”

Economists favor low and steady growth because
once the rate of growth slows the economy can slip into
a recession. Brendan Miniter is the author of The 4%
Solution. In the book, he claims that a 4% growth rate
can solve our economic problems. We can raise wages,
clean the environment, achieve full employment, pursue
clean energy, and protect individual liberties, but only
if we sufficiently grow. If we grow 5 percent, we can
put 2 percent more resources toward social programs
and still have a healthy 3% growth rate.

In the Endgame: The End of The Debt Supercycle
and How It Changes Everything, John Mauldin suggests
that nature can teach us something. Some California
counties have full-time firefighters to fight small forest
fires. Other counties have no full-time firefighters and
let small fires burn. Counties with full-time firefighters
have fewer fires, but when they do have fires, they tend
to be large. Mauldin concludes that when the
government tries to fend off every downturn, slumps
are less frequent, but once in a recession, it tends to be
severe.

Full Employment

The Bureau of Labor Statistics defines
unemployment as persons actively seeking

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