The ultimate extinguisher of debt
There was a time when unemployment “insurance” and other forms of dole were unknown in the United States. That was during the time when the country was on the gold standard and deflation meant an increase in the value (purchasing power) of gold. Whenever this happened, the battle cry inevitably was: “There is gold in them thar hills,” and people who had lost their jobs typically went out prospecting and panning for gold. Panning for gold always gave them an income and a chance to save some capital. The country did very well, thank you very much, with this “natural unemployment insurance.” The bottom line was: More gold for the economy. More gold cured the disease – deflation – and soon things were back to normal. Unemployment did not have a chance to become “structural.”
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