Recently there is a news that India has allowed the export of 0.5 million tonnes of sugar. In a country where hundreds of thousands of people are dying out of hunger, kids are malnourished…do we have any right to export food? Why despite of rising inflation we are exporting food? The answer is Govt deficit. Govt deficits (both fiscal and trade deficits) are exponentially growing and they are aggressively seeking ways to fulfill it. Why the deficits are growing? the answer is govt has created a huge unproductive service sector who needs to be paid salaries, even if their utility to the economy and producers is nil. The revenues which primarily comes from tax + other sources are not sufficient to meet these expenses, which are only growing as if there is no tomorrow. Any attempt to fulfill the deficit is basically an attempt to promote & sustain an unproductive service class. This can only happen by putting more burden on the shoulders of producers. And this can be done by raising tax and making people poor, devaluing the currency, exporting food thereby inflating the prices, etc. Thus the current system is a reverse pyramid where the the producers are in the bottom and being burdened more and more everyday. The day the bubble of “growth” will bust, the farmers will become rich because they will no longer have to bear the burden of unproductive class who were giving them no value. Today a farmer after his hard work is getting very little money. And whatever he gets, is being devalued by massive curreny printing. This is a daylight theft of the invisible purchasing power which the farmers have earned as a result of their hard earned labour.
The reason deficit financing is done and debt financed consumption is encouraged because Govt follows keynesian philosophy which believes principals of public finances are different than principles of private finance. They believe that consumption drives demand and which in turn drives production. But who has a right to consume? only that who produces OR who provides a real value to the producer(e.g., service sector that is a value to the producers). This reminds us of Jean Baptist Says law “Supply creates demand”, which is basically a derivative of universal vedic principle तेन त्यक्तेन भुंजीथा, which means first sacrifice then enjoy, first give then take, first produce then consume. Sacrifice gives us savings. Savings gives us capital. Capital is invested and as a result we get production. that is the real way to earn and produce wealth…not by printing of money.