The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians.
Interpretation
A strong monetary system should minimize political control over money to ensure its integrity and stability.
Henry Hazlitt emphasizes the importance of limiting political influence in the management of money to maintain a sound monetary system. By reducing the discretion politicians have over the quantity and quality of money, he argues that economic stability can be achieved, as this reduces the risk of mismanagement and manipulation, which can lead to inflation or other economic issues.
In practice
In a financial seminar discussing the importance of a stable currency.
A man with a scant vocabulary will almost certainly be a weak thinker. The richer and more copious one's vocabulary and the greater one's awareness of fine distinctions and subtle nuances of meaning, the more fertile and precise is likely to be one's thinking. Knowledge of things and knowledge of the words for them grow together. If you do not know the words, you can hardly know the thing.
Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
The only way we could remember would be by constant re-reading, for knowledge unused tends to drop out of mind. Knowledge used does not need to be remembered; practice forms habits and habits make memory unnecessary. The rule is nothing; the application is everything.
The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Never in the history of human credit has so much been owed.
At the current $5.15 an hour, the federal minimum wage has become a poverty wage. A full-time worker with one child lives below the official poverty line.
If low taxes were the way that people like me created wealth, then we'd be starting our companies in the Congo or Somalia or Afghanistan, but we're not. We come to places where there are lots and lots of customers.
Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.
Large corporations, of course, are blinded by greed. The laws under which they operate require it - their shareholders would revolt at anything less.
The truth of good economic doctoring is to know the general principles, and to really know the specifics. To understand the context, and also, to understand that an economy may need some tender loving care, not just the so-called hard truths, if it's going to get by.
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