David Hillary wrote:
> Bob wrote:
> >
> > One more thing. The US at one time was a SOE.
> >
> > About 1800 in the US a dollar bill (a note, not what it is
> > today) bought the same about 100 years later. This was a
> > gold standard era. It had no Fed!
> and in the next 100 years after that the income tax was introduced, with
> rates of up to 70%, the Federal Reserve was introduced, the New Deal
> welfare state was introduced,  The currency went off gold,  lots of regulations and 
>tariffs were passed,
> drugs were prohibited (including liquor for a while), the environment
> was regulated etc. etc. and the standard of living rose so dramatically
> more than in the previous 100 years that no one could have predicted it
> in 1900.

Right. And those things above did not all start in 1900. The
first income tax was 1913 at about a 1% rate on about 1% of the
population (the richest of the rich). Socialist America didn't 
get a real start until the '30s. And by 1950s most of the big 
increases of the US's standard of living had been acheived. 
Todays environmental scam started later than the '50s.

A lot of those increases had to do with what was going on 
during the 1800's due to a large amount of freedom and
relative price and interest rate smoothness. (ex: cotton 
gin, which was about to make slavery unprofitable, but 
Lincoln couldn't wait as he had a 2 year old war that had 
come to a stalemate and needed a new reason to keep it going).

Side note:

> deposit
> insurance was introduced,

If you're talking about FDR and the federal government, deposit
insurance was not introduced and to this day there is no federal
bank account insurance, and never has been. The FDIC (Federal 
Deposit Insurance Corporation) does not provide insurance. It's 
one of the three biggest legalized government frauds going just 
like US Social Security and the US SEC (Securities and Exchange 

> Under the gold standard there were periods of inflation and deflation.
> Also I understand the USD was fixed to gold AND silver, a bimetalic
> standard, where the metal of lower value could be used to redeem
> currency (some economists are now advocating bi-currency backed currency
> boards, so that the value of the currency would be worth the lesser
> valued of the two backing currencies, e.g. a currency board issuing
> currency redeemable for either 1 USD or 1 euro).

Sure, it wasn't 100 years of perfect smoothness (but generally,
yes). But if you look, you'll find short periods of price and 
interest rate volatility caused by government. Like the localized 
(a few states), so called "Wild Cat Banking Era". 

> > Today in the US both interest rates and inflation are higher,
> > with the Fed (started in 1913, the same year they started
> > the income tax).
> Growth is much higher also. Are nominal variables more important than
> real variables?

Real variables. How much of the US's GDP growth rate, in the last
10 years, is real wealth being created? I don't know but it's not
100%. Time will tell. A lot of what's going on right now in the
US is plain 'ol consumption provided by debt. Taking on debt to
create more wealth is one thing. Taking it on to consume is another.

> David Hillary
> p.s. nothing here to advocate government intervention such as income tax
> or fiat currency!




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