Combating Socialism

I was thinking to myself last night about what it would mean to me if we do, in fact become a socialist nation. We know socialism doesn't work. It doesn't produce the output needed to maintain a nation.

But it looks like we're headed that way anyway, it seems. It's amazing how socialist we already are. 33% of our output comes from the government. That number is decieving, since government output has very little to do with national wealth, even though it's counted toward the GDP. But that number will grow even more with this "stimulus" bill, and new policies are enabling even more government involvement.

So, what if this "stimulus" bill's effects are possitive enough in the short term to garner enough public support to nationalize the economy? We know, even if half the nation doesn't seem to, that the long term effects will be dire. But the economy is already projected to recover in the latter half of this year. If and when it does, who will get the credit? The "stimulus" bill, paving the way for greater nationalization of the economy.

Our public may be smarter than I'm giving them credit for, but I'm not counting on it.

So last night my mind wanders to what it will be like in a socialist nation, and I didn't like it. So my mind further wandered to how I would fight the system, try to change it, and I came up with an idea that I knew wouldn't be very plausible, but I liked the concept anyway, so I wanted to write it down.

I want to fight socialism with deflated capitalism. The idea requires that all participants be out of debt and have a small savings to start. A small community of participants would relocate to a remote locale, trying to minimalize non-local vistors. This community will live in a free market society, much like the small town days of old, doing anything and everything possible to avoid any government intervention.

At least 1 local bank would be instituted with gold or some other stable commodity as its assets. The bank will be required to have enough assests in gold to back any loans given, and will function independent of the Federal Reserve. I toyed with the idea of printing our own currency, but it would make any extra-local business, which already will be difficult, even more difficult.

Ok, now here's the key idea to this plan. At the formation of the community, it will be agreed to cut all prices of all products, services, everything in half for locals. All at the same time. What this does is immediately deflate the dollar by half. All of a sudden everyone's savings have instantly doubled (this is why no debt is allowed). From this point a small community of local businesses will continue as normal, all profits, expenses, etc halved. But everyone will be realtively wealthy, which will allow for high demand, driving good production. And the kicker is that all of a sudden your income is half as big, even though you're just as wealthy. So you will pay less than half your taxes, considering the non-linear tax scale, and government's impact will be reduced.

The trick, which I couldn't nail down last night, would be extra-local business transactions. I think we not only would have to allow some external transactions, we would want to. I would expect local production to exceed that of the rest of the nation, and at the inflated value of the dollar, it would be very profitable to our community. We would also have to import new technologies, products we don't produce ourselves, and materials. It would be treated much like foreign trade. The exports will bring in great profits, considering the price is doubled. So as long as we export more than we import, the benefits would be great.

Of course, this is simply fantasy, since it would be impossible to keep such a society hidden from a socialist government. And once it is discovered it would be crushed. However, I wonder if a capitalist society hidden inside a socialist nation could be successful enough for long enough to spark vision in the nation, so they could recognize the failure of socialism and remember the successes of capitalism.

Hey, it was late.