The Big State Monetary And Fiscal System Is Over

ZeroHedge, Sep 22, 2026 – Authored by Daniel Lacalle via dlacalle.com,

Excerpts:

In 2021, The Economist ran an entire number hailing “The Return of Big Government” as the end of the so-called – but inexistent in practice – “austerity” paradigm and the evidence that more spending and a big state was the solution to the post-covid world, delivering economic growth, social spending, and sustainability.

…..

The choice now is not the fake austerity of 2008-2012, which basically perpetuated big government and raised taxes. It is between a return to sound money, fiscal balance, lower taxation, deregulation, and a smaller state. Unless citizens start demanding their governments for more freedom and less intervention, the result will be a larger and prolonged period of stagnation, inflation, debt accumulation, and declining living standards.

…..

The answer to the economic stagnation and affordability crisis is not more socialism. More subsidies, price controls, redistribution, and direct state intervention have always delivered the opposite of what the politicians promise.

Socialism never works because it is a system of control, not progress. It destroys the incentives to generate wealth and creates a dependent and submissive population unable to defend itself. Socialists know that their promises do not work, but by the time citizens find out, they are already hostages of a powerful state machine.

Across Europe, governments that have continually expanded public spending, taxation, transfers, and regulation have not produced prosperity or relief from living costs. They have instead accumulated debt, weakened growth, raised the economy’s cost base, and deepened social discontent. Governments do not reduce prices; they increase them.

…..

Big corporations do not increase prices; governments do.

Socialism has one objective: control. Subsidies leave recipients dependent on political discretion while denying them the opportunities that come from productive employment, rising real wages, investment, and a dynamic private sector. At the same time, taxpayers are asked to finance an ever-larger state with less disposable income and fewer incentives to save, invest, hire, or start businesses.

Politicians then blame “the rich,” corporations, or markets for an affordability crisis that their own policies have created. Furthermore, no government can redistribute wealth from a private sector that is being steadily weakened by higher taxes, punitive regulation, inflation, and rising borrowing costs.

Affordability is not created by government control or by shifting existing income from one group to another. It is created when the private sector thrives, real wages rise alongside productivity, competition lowers prices, investment expands supply, and housing, energy, transport, health care, and essential services can be provided more efficiently and abundantly.

When governments confront structural supply constraints with redistribution, subsidies, price intervention, and debt-financed spending, they also undermine the incentives to invest, build, innovate, and improve productivity. The result is always a more expensive economy, greater dependency, and fewer opportunities.

_________________________

America can lead the way out of this burgeoning crisis – with the most powerful economic reset plan in the modern world.

_____________________________