r/austrian_economics

$10 billion a month spent on food when increases in productivity made it so that from 1950-2026 the average amount spent on groceries in the US went from 30% to 5-10% according to the Department of agriculture; it’s clearly unnecessary based on what recipients spend it on and these extra facts

1: “In 2025 and 2026, the average American household spent approximately 8.1% to 13% of its median income on groceries. The exact percentage is heavily dependent on location, with residents in states like Massachusetts and California averaging closer to 6.7%, while households in states with lower median incomes, such as Mississippi and Louisiana, spend up to 12% to 13% of their earnings on food at home.” If food is clearly this cheap although monetary policy is making it unaffordable relative to a few years ago, but historically it’s so cheap here in the US. There’s a reason our pizza is the way it is (Yummers).

2: The single parent problem amongst the black community;
As Thomas Sowell hammered down to us; According to economist Thomas Sowell, the poverty rate in the Black community was cut nearly in half over the span of a generation, dropping from 87% in 1940 to 47% by 1960. Sowell stresses that this massive 40-percentage-point decline occurred before the passage of major civil rights legislation or the creation of Great Society welfare programs, people can figure there life’s out, govt don’t need to come in.
When the expanded welfare state was introduced in the 1960s, Sowell argues that it slowed down economic progress and caused severe social retrogression, specifically by decimating the Black family structure. The government came knocking and now single parenthood amongst blacks is 60% today; Sowell points out that in 1960—after a century of enduring the legacy of slavery and Jim Crow—the vast majority of Black children (78%) were raised in two-parent households. By 1985, after two decades of welfare expansion, that trend completely reversed: 67% of Black children were raised in single-parent or no-parent homes.

3: as relating to the second point Thomas Sowell explained with a few words.. “what’s the point of producing when you can live off what others produce?” People have this misconception that these social programs are “steppingstones” or helping hand, but no, it’s a handout, which causes people to have their time preference raised instead of accomplishing low time preference, of course, especially with the single parent problem can teach people in welfare to have bad traits that naturally lead to bad social and individual outcomes

4: the helping hand affects that supporters of SNAP talk about is actually compensating for mistakes of government that stifles opportunity and makes things expensive. Minimum parking spaces (something the left and right agree on for different reasons, but overall has to go), property taxes, minimum wage laws, etc

The final note is this: “The National Park Service issues signs that say 'Please Do Not Feed the Bears' because the animals will grow dependent on handouts, lose their wild instincts, and fail to learn how to survive on their own. Yet, the government turns around and applies the exact opposite philosophy to human beings through the welfare state."

https://www.eldebate.com/espana/20260604/ocho-guardias-civiles-trama-quiso-purgar-reunirse-leire-diez-directora-general-cuerpo_424939.html

Quick concession up front, because this is the one room where I don't have to argue for it: the dollar loses value by design. A dollar saved in 2000 buys about 54 cents now. Fractional-reserve banks create money as debt, a discretionary central bank manages the price of credit, and the result is a slow, deliberate transfer away from anyone who holds the currency. You already know this. It's the disease, not a side effect.

So, I'll skip selling you the problem and go straight to the part you'll want to fight. I've built a worked-out alternative, and I'm posting it here because this is the room most likely to find where it breaks.

Here's what should interest you before you write it off as statist fiat. Banks can't create money by lending. Transaction accounts are fully reserved, and credit is intermediation of money that already exists, not new money conjured at the keystroke. Issuance is bound by a fixed rule tied to real growth, not a committee's discretion, closer to a monetary constitution than to a Fed meeting. And there's no interest-rate channel at all: rates are set by the market, not steered by a central authority. Full reserve, rules over discretion, no policy rate. Those are your priors, not the Fed's.

The setting I think is actually interesting for this room is the deflationary one. There the supply grows slower than real output by rule, so the price level drifts down close to 2% a year and every dollar you hold quietly gains purchasing power, not because a committee chose to be virtuous but because the rule won't let it do otherwise. That's the benign, productivity-driven deflation, not a frozen economy, and it's fixed constitutionally rather than left to anyone's judgment. It's also only one of the configurations the architecture allows, not the whole of it.

Now the parts you'll want to attack, said plainly, because they're the real fight.

First: the money is still issued by a public authority. It's sovereign. Not gold, not competing currencies, and I'm not going to pretend otherwise. The claim is narrower than "this is sound money." It's that a full-reserve, rule-bound, growth-tied issuance strips out the discretion and the debasement that make fiat rotten, without the supply rigidity of a metal standard. Whether that's enough, or whether sovereign issuance is rotten root-and-branch regardless of the rule, is exactly what I want argued.

Second, and this is the sharpest blade I can hand you: in the floor-building configurations the new money doesn't drop from a helicopter. It buys broad-market equity, which makes the issuer a large, price-insensitive buyer of stocks. I model the effect as a bounded valuation premium rather than a runaway one, because the buyer turns into a net seller as the population ages and firms issue more equity into the bid. But "bounded" is a claim, not a law, and a permanent sovereign bid under the whole index is precisely the kind of capital-market distortion this sub is right to be suspicious of. If it breaks anywhere, my money's on here. Tell me why the premium doesn't stay bounded.

And before someone says "just don't have the state buy stocks": you can configure it that way. There's a pure-dividend setting that buys no index at all. But that doesn't make the distortion vanish, it moves where it lands. The new money then goes into the goods circuit as a direct dividend instead of into equities. The framework's claim is that this stays goods-price-neutral as long as the dividend is capped by the same growth-matched budget, on the logic that it hands citizens a claim on real output the economy actually produced rather than new demand against a fixed supply. Push it past that budget and it becomes inflation by design, which is exactly how you select the inflation mode. So, the second target is that neutrality claim itself: is a dividend tied to real growth really non-inflationary, or does money handed to consumers bid up prices no matter what you tie it to? Pick whichever you think is the weaker link, the asset-price premium or the goods-price neutrality and aim there.

The redistribution piece, a per-person wealth floor some of you will object to on principle, is downstream of the monetary rule and separable from it. The issuance can be configured without it. Argue it if you like, but it isn't the load-bearing claim. The load-bearing claim is the money itself: can a discretion-free, full-reserve, growth-pinned issuance hold its value, or does it fail in a way I haven't modeled?

Fourteen papers, a macro model, and an interactive engine you can run in your browser, all built to be attacked rather than believed. The transactional-money claim it rests on now has two independent constructions that converge on the data, with full replication code, so there's something concrete to break, not just an assertion. If it's just fiat with extra steps, this is the room that will prove it.

Front door with all papers & replications: https://neo-solon.github.io/Citizens-Standard/front_door.html

He did not study Austrian economics, or economics in general, what he did do is he looked up a bunch of thinkers and what they claimed to explain instead of their work and then critiques a bunch of their quotes.

Progressives are simpletons at economics from Capital in the 21st century to actually even having some so-called economists support rent control? Economics is getting turned into a field where the most anti-economic people actually fit in such as socialists, or they just don’t study enough for example AOC has a bachelors in economics?

Global debt just crossed $315 trillion, ~3x world GDP, two-thirds of it in the advanced economies. It left me with a question I can't un-ask: if everyone is in debt, who does the world actually owe?

Following it honestly led somewhere uncomfortable:

- Modern money is created as debt (BoE's own 2014 bulletin: ~97% of money is bank lending). The principal is created, the interest isn't, so total debt has to grow faster than the money supply. The recurring crashes look structural, not accidental.

- The Ottoman bankruptcy of 1875 is usually cited as proof Islamic economics fails. But the Ottomans avoided interest-bearing foreign debt for centuries and only collapsed AFTER their first European loan in 1854. The default followed *abandoning* the riba prohibition, not applying it.

- Zakat is the part I find most interesting: a 2.5%/yr levy on idle wealth (not income), which structurally punishes hoarding and pushes capital into production. The opposite of how income tax works.

I'm not claiming any current Muslim-majority country runs this well (most don't, and I get into why). I'm arguing the *principles* hold up, and that the West already uses pieces of them (VC = profit/loss sharing; Islamic banks took zero 2008 bailouts).

Wrote the full argument with sources here if useful Link in first comment below

Genuinely want the strongest counterarguments — where does this break?

here is my full article: https://www.rashadbayram.com/blog/islam-third-economic-system

Is this not how you read it? Does he need to go out on the streets of Washington D.C. and yell out “I won’t hike rates” for the street to understand that he is a dove? This is the playbook of a central bank yielding to political power. Change the measures of inflation so that you don’t have it as high anymore.

https://www.cnbc.com/2026/07/01/warsh-faces-multiple-alternative-inflation-signs-as-fed-charts-new-course.html

Thomas Sowell is to a lot of people the first economist who started shifting them to the right path of common sense economics. Sowell is what I like calling Austrian adjacent, due to his books that he writes for the General public such as his famous basic economics and wealth poverty and politics.

Sowell is now 96 years old.

Happy birthday 🎉🎂

Sowell and his interviews at the Hoover institute