1.28.2008

Mr. Rogers For President,. Part VII: The Emperor has No Gold

It was so weird. While all the other candidates spouted out the answers that Republicans wanted to hear, Ron Paul was talking sense--at least on that one issue. More than that, he was the only one who was concerned not only with how he wanted the world to be, but with being scrupulously lawful in the way we go about making the world a better place. His words displayed a quality so strikingly unexpected in a politician... integrity.

So I thought it was worth listening what he had to say about economics.

Now I have to start out by saying that I disagree with Dr. Paul about the gold standard. The constitution does not say that only gold or silver can be legal tender, it merely says that individual states are not allowed to issue any other type of money. Since no such restrictions were placed on Congressional authority to regulate currency, it seems pretty clear to me that Congress is allowed to issue fiat money. It also seems clear to me that it's a good idea for them to do so. Mild inflation is fairly innocuous, and it prevents the economic disasters that come from even the tiniest bit of deflation, so I think a little bit of inflation is a wonderfully reasonable way for the federal government to fund itself.

Problem is, that's not what's happening.

I'd always wondered how we could possibly have such a huge national debt when the government could just print out money out of nothing.

It turns out there's a very simple answer.

The government doesn't print out money.

Congress has transfered its Constitutional powers over money supply to a privately owned bank, the Federal Reserve.

The government then borrows funds from the Fed... at interest. The income tax is barely sufficient to pay the yearly interest on the national debt, let alone any expenditures, and viola, the whole nation is laboring under a negative-amortization loan.

This is silly.

Moreover, it's unethical.

I think that inflation is a perfectly legitimate way to fund the federal government. It is not a legitimate way to fund private stockholders. The Bible has an awful lot to say about what God thinks of nations that allow the rich to steal from the poor, and it isn't pretty.

This system is also just about the most dangerous national security threat that I can think of.

When our money supply--and thus our ability to arm and support our military--is completely at the mercy of unsupervised private financial interests, this is an enormously frightening situation.

But in any case, the current system is stupid and immoral...

And nobody else is talking about it.

1 comment:

Destination...Gloryland! said...

When you start talking about this stuff, often people start looking at you funny and yelling, "You're into conspiracy theories aren't you!" Hence, it isn't talked about much...