The archive.

The 2003 Medicare prescription-drug expansion arrives here not as health reform but as a move in a permanent struggle over who pays and who receives. Sennholz reads the parties' sudden role-reversal, Republicans now championing an entitlement they once resisted, as a clever maneuver rather than any conversion of principle, and he redescribes social insurance bluntly as public assistance. The projected $400 billion covers only a fraction of seniors' drug bills, and the uncovered remainder, he notes, is precisely what invites the next round of expansion. From there the essay forecasts a widening administrative war: rising costs bring investigation, price pressure, and regulation of pharmaceutical firms and physicians, so subsidy becomes supervision and supervision becomes stagnation. Carried far enough, Sennholz warns, entitlement conflict without end summons a supreme arbiter armed with emergency powers to enforce social peace.

Politics rarely listens to reason and economics; it is search after power masquerading as a contest of principle.

A giant inverted pyramid, $692 billion in Federal Reserve notes supporting some $8.9 trillion in bank deposits, governs Sennholz's picture of the American fiat system, an unstable construction that distorts production, erodes savings, and subsidizes government debt. Rapid monetary expansion need not surface in the consumer-price index, he argues, because official measures emphasize stable consumer goods while ignoring surging prices in real estate, commodities, and raw materials; meanwhile cheap imports from China, India, and Malaysia and foreign appetite for Treasury securities temporarily suppress both prices and interest rates. This arrangement, in which foreigners trade real goods for American promises, is historically exceptional and politically fragile. Should their willingness end, he predicts higher rates, a falling dollar, soaring prices, and another boom-bust cycle, and closes with the case for honest commodity money against a currency severed from market discipline.

The love of money, fiat money that is, is the root of much evil.

April 15 turns depreciation schedules and deduction forms into a moral test. Sennholz's 1998 essay asks how a reflective citizen should act when private honesty is demanded by institutions he judges coercive—whether to correct an accountant's favorable error, and whether resentment at an arbitrary IRS can ever license dishonesty. His answer refuses both easy exits: two wrongs make no right, yet legality does not make plunder moral, and redistribution by majority vote remains continuous with theft. Between Kantian truth-telling and consequentialist calculation he seeks a hierarchy of duties in which truth is basic but not absolute, property essential but no idol above life. Lawful avoidance—tax-exempt investment, charitable foundations, even emigration—becomes the mediating practice. Private and civic morality, he concludes, stand or fall together.

Stealing is not defensible morally even if it is done by majority vote.

Years of rate cuts and rapid credit expansion had failed to dispel recession, leaving the Federal Reserve, in this September 2002 essay, genuinely trapped. Further ease might undermine the dollar and estrange foreign creditors; yet with firms insolvent, debts liquidating, and households hoarding cash, cheaper money might accomplish nothing. The dilemma, Sennholz argues, is the Fed's own handiwork—an abused, overleveraged credit market turned unmanageable after long manipulation. He grants the dollar a unique privilege as the world's reserve currency, yet insists that privilege rests on foreign confidence increasingly spent on Treasury debt rather than productive enterprise. Recession, he notes, can mask inflation as distress sales push prices down even while the money stock swells. Japan supplies the warning; a looming Iraq war, he predicts, would only postpone the reckoning.

The Federal Reserve System may have run out of room to maneuver.

Medicare's crisis, Sennholz insists, is not demographic but ideological and moral—a program misdiagnosed when blamed on baby-boom retirement rather than on the doctrine that elevates the state into universal provider. This December 2002 essay traces federal health policy from German and British social insurance through Roosevelt, Eisenhower, Johnson, Reagan, and Clinton, then turns to the machinery of supervision: HCFA reviews, the Benefit Integrity Unit, the HHS Inspector General. Subsidized demand cannot abolish scarcity, he argues; when market allocation is displaced, rationing returns as rule, review, and decree. Administrative terms like aberrant and medically necessary become instruments of normalization, and official education becomes intimidation that exposes physicians to fines, imprisonment, and ruin while pushing the ablest to opt out and contract privately. Reform, he predicts, will change the form of coercion more than its substance.

The welfare state breeds insoluble political and social conflict.

Never before, Sennholz observes, have monetary and fiscal policies been so stimulative while the economy remained so weak, and that paradox drives this catalogue of possible futures for the dollar. The essay's engine is the falsification of interest rates: when the Federal Reserve suppresses the market rate that coordinates saving and investment, business calculation is corrupted and debt-financed consumption swells beyond sustainable limits, down to households that converted home equity into fresh spending. He then lays out competing scenarios, continued foreign financing, a creditor withdrawal and crisis, abrupt stabilization, inflationary collapse, protectionist escalation, orderly adjustment, rejecting both complacency and total apocalypse. Asian central banks sustain the deficits for now, but their trust wears thinner daily. His preferred path is gradual, painful discipline: balanced budgets, restored market interest, and ultimately a gold-backed dollar to rebuild international confidence.

The Federal Reserve’s utter disregard of the market rate of interest, which guides the efficient employment of all factors of production according to consumer choices, is bound to do great harm to the economic structure.

Justice once meant rendering each person what is due; modern "social justice," Sennholz argues, quietly rewrites that standard into a mandate for state-managed welfare, making officials the superior judges of individual rights. Tracing the term from Plato and Aristotle through biblical ethics and Aquinas, this classical-liberal critique watches a moral and juridical idea harden into administrative redistribution. His economic objection turns on capital: confiscating or forcing the liquidation of productive assets does not merely shift purchasing power but erodes the capital structure on which wages and employment depend. Welfare economics, progressive taxation, Social Security, and Medicare become engines of dependency, bureaucracy, and envy, dividing society into providers, recipients, and administrators, and closing, with Benjamin Franklin, on the corruption that follows when a people can no longer master itself.

A "social justice" society is a conflict society which locks beneficiaries and victims alike in a struggle without end.

Framed against recessionary anxiety and White House warnings that a light was flashing on the economy's dashboard, President Bush's 2001 proposal to cut taxes by $1.6 trillion is weighed here and found wanting, not because lower taxes are undesirable but because a cut that leaves spending, debt, and monetary intervention intact is no reform at all. The critique targets the plan's Keynesian defense as consumer stimulus and the supply-side hope that lower marginal rates alone constitute fiscal repair. Child credits, marriage-penalty relief, and estate provisions look attractive yet economically thin, while projected surpluses dissolve once trust-fund accounting is stripped away. If recession is the painful readjustment after prior distortion, consumption cannot restore sustainable production, and unfunded cuts merely shift burdens onto borrowing, future taxation, and the Federal Reserve.

It is significant that the tax plan makes no mention whatever of any need for a reduction in government spending.

Blame the speculators: that was the official explanation for the currency collapses that swept Southeast Asia in the late 1990s. This hard-money post-mortem turns the charge back on the governments themselves, which pegged their currencies to the dollar while inflating domestic money and credit. The crisis, Sennholz argues, springs from the standing conflict between the market rate of a currency and the official rate—between economic principle and government edict. Pegs attract foreign capital and mute exchange risk, but they store instability rather than remove it; when the peg snaps, dollar- and yen-denominated debts turn crushing, banks buckle, and asset inflation is exposed as malinvestment. He rejects the IMF's faith in dollar pegging and warns a complacent United States against assuming immunity. The turmoil, he concludes, is the making of governments and their central banks.

Fixed exchange rates act like "coiled springs;" growing compression finally releases the energy.

Fiscal legerdemain is the charge at the heart of this November 2000 polemic: the celebrated Clinton-era surpluses, Sennholz contends, are an accounting illusion produced by counting Social Security and other trust-fund inflows as current revenue while the national debt keeps climbing. He separates genuine debt reduction from mere debt shifting, retiring bonds held by the public by drawing on obligations owed to future retirees, and treats the Treasury's reliance on trust funds and Federal Reserve remittances as circular, costless-seeming finance that conceals an inflationary base. Behind the arithmetic lies a hard-money conviction that the power to create money is a coercive privilege silently depreciating the dollar. The forecast is bleak: demographic pressure from Social Security and Medicare will convert today's paper balances into tomorrow's large deficits.

The power to print money and force it on the people is the power to engage in inflation, which is one of the political evils of our time.

By March 2001, as the dot-com boom collapsed, the Federal Reserve had become the object of a cult, with Wall Street, journalists, and politicians alike crediting Alan Greenspan's guidance for a decade of prosperity. Against that reverence stands this Austrian polemic, which reverses the usual causal story: central banks do not merely fail to prevent busts, they manufacture the preceding booms by issuing fiat money and credit that falsify interest rates and lure entrepreneurs into malinvestment. Rate cuts cannot turn bad investments into sound ones; recession is the painful liquidation of accumulated error. Keynesians, Supply-Siders, and Monetarists are each faulted for retaining a central monetary authority, and the classical gold standard is invoked as the obstacle to heedless spending that fiat money removed, even as every organized interest keeps demanding more credit, not less.

Ideas control the world, and monetary ideas shape monetary institutions.

Germany's early-2000s stagnation, on this diagnosis, is no passing downturn but the accumulated weight of decades of welfare-state expansion, heavy taxation, labor-market rigidity, and subsidy. Beginning with German opposition to the Iraq War, the essay reads Schroeder's antiwar stance chiefly as electoral maneuvering that distracts from unemployment and malaise. The history runs from the freer conditions of the postwar Wirtschaftswunder through the Social Democratic turn after 1968 to Kohl's accommodation with intervention and the fiscal burden of reunification; the Red-Green coalition appears not as rupture but as another stage on the same trajectory, its tax cuts outweighed by energy levies, union power, and pension obligations. What Germany lacks, Sennholz concludes, is not technical knowledge but the political capacity to dismantle privilege and recover the market freedom he ties to the postwar miracle.

The official German position must be viewed in the light of politics, which is simple strife of party interests masquerading as a contest of principles.