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Keynesian vs Austrian Economics, National Debt and the Free Market

Listeners’ Questions, Peter’s Answers Audio – May 20, 2013

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Jason in Antioch, CA
I am pursuing a dual degree in Political Science and Economics. After reading your books, “How an Economy Grows and Why it Crashes,” and “The Real Crash,” as well as the work of several Austrian economists Hayek, Hazlitt, and Murphy, I find that I will have trouble accepting the arguments of many of my Keynesian influenced professors. Do you have any words of advice for this student of economics?

James in Galloway, NJ
If we had a bank holiday in the US and banks were closed like what recently happened in Cyprus, does that mean I wouldn’t even have access to safety deposit boxes where I have gold and silver stored?

Chris in Alexandria, VA
If the Fed buys the majority of our government’s debt this year as it did last year, I believe, then why can’t the Fed, when that debt comes due, simply not accept payment? They create the money, exchange the money for debt, the government spends the money, and then when the debt matures it just “disappears.” Why wouldn’t that work?

Nick in London, GB
Given the level of austerity that much of the EU and now UK is facing, how much more beneficial would it be for these countries to reduce government interference and encourage a free market to repair the countries’ woes? Would the free market aid recovery better than government restriction or do we need government to help sort this out?

Phil in Montgomery, AL
When Rothbard talks about higher orders of production declining in a depression, it makes sense commodities like copper, oil, etc are declining prior to the upcoming depression. Where does gold fit into an “order of production” schema, is it a consumer good or a higher order?