Home » Posts tagged 'Austrian School'
Tag Archives: Austrian School
How the Federal Reserve Steals from the Middle Class
How the Federal Reserve Steals from the Middle Class.
Krugman: “Fiat Money…Backed By Men With Guns” – Ludwig von Mises Institute Canada
Krugman: “Fiat Money…Backed By Men With Guns” – Ludwig von Mises Institute Canada.
Say what you will about Keynesian superstar Paul Krugman, he doesn’t mince words. In a recent interview with Business Insider’s Joe Weisenthal, Krugman gave his opinion that Bitcoin was in a bubble because it wasn’t backed by a tangible asset.
Perhaps sensing that this may have undercut the case for Krugman’s preferred monetary system, Krugman was quick to add thatgovernment-issued fiat money was “backed by men with guns.” (See the video for yourself.) Thus, Krugman thought that government currencies were not in a bubble, even if they weren’t backed by tangible assets, because people needed to obtain the currency in order to pay taxes.
Krugman’s analysis provides a good opportunity to explore the subtlety of Ludwig von Mises’ monetary economics. On the one hand, Mises was a “hard money” man who was a fierce opponent of government fiat money. It is also true that Mises was a classical liberal who would have opposed government coercion in the form of legal tender laws, capital gains taxes on gold and silver, and other ways that governments currently use their “guns” to solidify the present system where most people on Earth use government-issued notes as their primary form of money.
However, even though a libertarian and proponent of Misesian economics might object to government-issued fiat money because of the coercion–”men with guns”–involved, strictly speaking Mises would not agree that a currency can be backed by guns, in the way Krugman describes. To speak in this manner is a complete surrender in the face of the economist’s task of explaining money.
Mises’ grand work in this area is his The Theory of Money and Credit, for which my free study guide is available. As Mises conceived it, the central theoretical task when it comes to money is to explain why money has a particular purchasing power. Why should it be that people give up valuable goods and services for a particular item–the money commodity–according to definite exchange ratios?
Mises’ answer is that people form expectations about the future purchasing power of money, and that is what gives it purchasing power today. These expectations in turn are based on their observations of the money’s purchasing power in the past. Thus lays the groundwork for Mises’ famous “regression theorem,” in which people’s subjective valuations of money necessarily involves a historical component (unlike their subjective valuation of, say, pizza). Gold, silver, and other forms of commodity money could ultimately be traced back to the days of barter, in which they had definite exchange ratios with other goods because of their usefulness as regular commodities.
In the case of government-issued fiat currencies, Mises explained their purchasing power using the same theoretical apparatus. The only difference is that at some point in the past, the currencies (such as the dollar, pound, franc, etc.) had been explicitly linked to the precious metals, and that’s what grounded everyone’s valuations of them.
Thus, Krugman’s glib assertion that today’s government fiat monies derive their value from guns completely dodges the problem for the economist: to explain the magnitude of that value. Even if we conceded that the government could force everyone to use something–let’s say a particular type of sea shell–as money, by insisting on payment of taxes in the form of sea shells, that policy wouldn’t explain why an hour of labor should trade for 10 shells, rather than 100 or 1,000. This is especially true when we reflect that most government taxes are expressed in terms of percentages, rather than an absolute amount.
Furthermore, it’s obvious that Krugman’s “explanation” would have no way of accounting for changes in either variable. For example, in the 1970s in the United States, price inflation took off dramatically, meaning the purchasing power of the dollar fell sharply. Was this because of a reduction in taxes? Of course not. And in the 1920s, there were sharp cuts in marginal income tax rates at the federal level. Did this lead to severe price inflation, as people now didn’t need as many dollars to pay Uncle Sam? On the contrary, consumer prices were fairly stable in this period.
As these observations should demonstrate, Krugman really hasn’t offered a viable explanation for the purchasing power of money. One might be tempted to say that at best, governments can use their taxing power to dictate what the monetary unit is, even though they would still have little control over its purchasing power.
Yet even this concedes too much. Strictly speaking, if the only policy we are considering is that the government says every year, “Citizens must turn in such-and-such number of sea shells as tax payment,” that alone won’t even be sufficient to conclude that the sea shells will be the money in this society. People could still use some other commodity as the money, and then use the actual money to buy the sufficient number of sea shells each year right before paying their taxes.
UPDATE: After originally posting this, I realized there was a problem with one of my examples: In the 1920s amidst the marginal income tax rate cuts designed by Treasury Secretary Mellon, the U.S. was still on the gold standard. Thus this period is not a good refutation of Krugman’s explanation for fiat money’s exchange value. (Of course, we can simply look at other examples of governments that engaged in large-scale tax cuts even while using a fiat currency, and we don’t typically see a sharp rise in price inflation accompanying them.)
Robert P. Murphy is the author of The Politically Incorrect Guide to Capitalism, and has written for Mises.org, LewRockwell.com, and EconLib. He has taught at Hillsdale College and is currently a Senior Economist for the Institute for Energy Research. He lives in Nashville.
DEATH OF INDIVIDUALISM « The Burning Platform
DEATH OF INDIVIDUALISM « The Burning Platform.
Posted from The Daily Bell without comment, an editorial by Wendy McElroy.
The great political lie is that individuals need the state. It is a lie on at least two levels.
The first layer of the great lie: It states the opposite of what is true; the state needs individuals. And the state is desperate for you to believe it is indispensable to your life. If it were not there to “take care of you,” the state wants you to believe that your children would be uneducated, the roads would remain unpaved, health care would disappear, foreign tanks would roll past your doorstep and crime would run amok in the streets. Nonsense.
The state produces nothing; it only takes and consumes what productive individuals create. The few state ‘services’ that mimic free-market ones are so notoriously inefficient and incompetent that they are often worse than nothing at all; public schools are an example. Moreover, the purpose of the ‘services’ is not to benefit society but to skim tax dollars from it and to exert social control over it. If the state wanted society to function at its potential, then it would step out of the way of private competitors rather than hobble or ban them. Instead, it obstructs private services precisely because they perform far better and less expensively.
The second layer of the great lie is its foundation. Namely, there is no “state” as opposed to individuals. Both the state and society consist of nothing more than their individual members and the sum total of their interactions. In other words, the state consists of individuals who organize together according to a set of rules; the individuals cooperate together in order to perform specific acts, from passing legislation to delivering tax bills. But every act of the state devolves to one individual dealing with another individual. In his magnum opus, Human Action, the Austrian economist Ludwig von Mises described this dynamic. “First we must realize that all actions are performed by individuals… If we scrutinize the meaning of the various actions performed by individuals we must necessarily learn everything about the actions of the collective whole. For a social collective has no existence and reality outside of the individual members’ actions.” The state exists only through its individual members.
In viewing abstractions such as “the state” as the sum total of their individual members, Mises did not deny the importance of the abstractions. Quite the contrary. Mises explained, “Methodological individualism, far from contesting the significance of such collective wholes, considers it as one of its main tasks to describe and to analyze their becoming and their disappearing, their changing structures, and their operation. And it chooses the only method fitted to solve this problem satisfactorily.” Methodological individualism is an analytical tool through which to make sense of the collectives such as the state, society and family.
With regard to the state, Mises offered an example of how to analyze its dynamics. “The hangman, not the state, executes a criminal. It is the meaning of those concerned that discerns in the hangman’s action an action of the state.” This is a key point. The people who look upon the hanging see nothing more than one individual killing another individual; that is the visceral reality before their eyes. They ‘see’ a state action and an execution only because they grant the hangman the legitimacy of being a representative of the collective known as “the state.” Their belief converts what would be a wanton killing into a justified execution.
And, yet, Mises wrote, “It is illusory to believe that it is possible to visualize collective wholes… We can see a crowd, i.e., a multitude of people.” But, as with the hangman, we do not see authority or “the state”; all we see are people. Mises continued: “Whether this crowd is a mere gathering…or any other kind of social entity is a question which can only be answered by understanding the meaning which they themselves attach to their presence. And this meaning is always the meaning of individuals…. [A] mental process makes us recognize social entities.” Individuals who form the state through their membership attach a specific meaning to gathering and coordinating with each other. The meaning or purpose is to exercise the perceived privilege to rule over individuals who are non-members. To do so, it is necessary to convince non-members of the state’s legitimacy.
The 18th century political philosopher William Godwin – the first modern proponent of anarchism – observed, “Government is founded on an opinion… A nation must have learned to respect a king, before a king can exercise any authority over them.” The process by which this opinion is formed can be called “mystification.” This is the process by which the commonplace is elevated to the exalted. Thus the state comes to be seen as more than its individual members, as higher than society. The state becomes an independent entity to which individuals swear loyalty, for which they send their children to die in wars and toward which they genuflect. The mystique is maintained in many ways, including: the pomp of swearing-in ceremonies; awe-inspiring buildings such as the Supreme Court; the rituals of saluting flags with hands over the heart; uniforms that minimize individuality; the appeal to tradition such as the American Revolution; and, most importantly, the public schools that teach the legitimacy of the state along with the alphabet.
Mystification sanctifies the actions taken by individuals in the name of the state. That is, a double standard of morality is introduced – one for individuals who are members of the state and another for non-members. The double standard contradicts a longstanding principle of liberty; namely, that a violation of violates committed by an individual remains a violation of rights when performed by a group of individuals. The group does not relinquish personal responsibility by acting in someone else’s name. Rape is no less rape because a gang is involved or because they shout “do for England!” A 1657 pamphlet (ascribed to the rebel Colonel Titan) argued, “What can be more absurd in nature and contrary to all common sense than to call him Thief and kill him that comes alone… and to call him Lord Protector and obey him that robs me with regiments and troops?” And, yet, this is what the state accomplishes. It converts an act that would be theft if committed by an individual into a ‘legitimate’ act of taxation when committed by a group in the name of the state.
The state pulls off this moral sleight-of-hand because non-member individuals accept that it functions by a different standard of morality. The radical individualist R.C. Hoiles, who built a publishing empire, called this double standard “The Most Harmful Error Most Honest People Make.” An editorial in his flagship newspaper The Orange County Register (Dec. 17, 1956) explained that the error “is the belief that a group or a government can do things that would be harmful and wicked if done by an individual and produce results that are not harmful, unjust and wicked. It is the belief that a number of people doing a thing that is wrong for an individual to do, can make it right and just.”
Hoiles went one step farther. He went beyond the visible violations of right that occur under the double standard to make a more subtle point. In another Register editorial (Oct. 31, 1958), he argued that the “profit motive” was more accurately called the “hope of rewards.” A man worked for one of two reasons: “Either he has hope of rewards or he is forced.” The former was freedom; the latter was slavery. A double standard by which the state expropriated the wealth which individuals had freely produced only created slavery. The state destroyed the “hope of rewards” not only through direct violation of rights such as taxation but also by granting legal privileges to individuals who comprised entities such as corporations. The privileges constituted theft because they robbed private producers of the right to compete fairly and, so, they robbed individuals of hope itself.
The state exists as an engine of privilege only because the vast majority of people believe that the individuals who comprise it can properly operate on a double standard. If state agents, from the president to post office workers, were viewed as individuals who are bound to the same rules of decency as the rest of us, then the state as we know it would crumble as the illusion it is. Freedom will come when the same standard of morality is applied to the individuals who are the state; the path to freedom is methodological individualism.
The Fed Turns 100: A Survey of the Critics – Gregory Bresiger – Mises Daily
The Fed Turns 100: A Survey of the Critics – Gregory Bresiger – Mises Daily.
End America’s central bank because it caused the crashes of 2008, 1987, and 1929 and will blunder again.
That’s what many critics are saying about the Federal Reserve System (the Fed), which turns 100 on December 23. They note that on the Fed’s watch America has endured numerous bubbles, crashes, and inflationary cycles that have greatly devalued the dollar. The Fed, they say, has caused or aggravated several crashes.
“The Fed’s performance over the century has been abysmal, no matter how you look at it,” says Professor Joseph Salerno, a business professor and monetary expert at Pace University.
“If you say the goal of the Fed was to prevent calamities, then you have to say that it has been a failure,” says William A. Fleckenstein, a hedge fund manager and the author of Greenspan’s Bubbles.
Fleckenstein says he’s seen two bubbles over the past quarter century. He also believes that, under the Fed’s system of easy money, of interest rates of close to zero percent over the past few years that, “the Fed is once again creating a bubble.” The Fed should be abolished, he adds, because it has no accountability for its mistakes.
The length of the Fed’s charter is indefinite, said Fed sources, who would only speak on background. And that is generally the only way Fed sources will speak when asked about the bank’s current policies or historical record.
What is the Fed?
The Fed is a bank for banks that creates money. It is designed to be a lender of last resort to sick banks in times of crisis. And crisis is one reason why the United States finally returned to authorizing a central bank a century ago. (America had previously had a central bank in the 19th century, but its legislative re-authorization was vetoed by Andrew Jackson who railed against a central bank as the tool of moneyed interests.)
The Fed began with the goal of protecting the dollar. It was given the exclusive right to create money in 1913.
The Fed would “provide a means by which periodic panics which shake the American Republic, and do it enormous injury, would be stopped,” according to Robert Latham Owen, one of the authors of the original Federal Reserve Act.
Why was it given these powers?
After the Wall Street banking Panic of 1907 led numerous banks to fail, “there was a growing consensus among all Americans that a central banking authority was needed to ensure a healthy banking system and provide for an elastic currency,” according to the official Federal Reserve history.
But critics claim the Fed has made things worse. Subsequent problems were the result of Fed governors giving in to political pressure, providing elastic or “cheap money.” This is the controversial Fed policy of setting interest rates. If set too low, the rates will mislead consumers and businesses, causing them to borrow too much. And that can lead to a cycle of boom and bust.
That’s what many believe happened in 2007-2008 as millions of Americans were encouraged through cheap-money policies to use subprime loans to buy homes they couldn’t afford. But Fed critics contend that it had happened before.
For instance, interest rates were dirt cheap in 1972, which led later to an economic disaster as inflation jumped to 10 percent and interest rates went to over 20 percent in the 1970s.
“The consequence of the monetary framework of the 1970s was two bouts of double-digit inflation,” said Fed Chairman Bernard Bernanke in a recent speech entitled, “A Century of U.S. Central Banking: Goals, Framework, Accountability.” These 1970s events killed interest sensitive industries and destroyed many small businesses that couldn’t obtain credit.
These controversial money policies have lead to crashes, depressions, and recessions, including the crash of 1929 and resulting Great Depression, critics say. Some 10,000 banks failed between 1930 and 1933, according to Fed numbers.
“Tragically, the Fed failed to meet the mandate to maintain financial stability,” Bernanke said in his speech.
“Many people,” according to the official Fed history, “blamed the Fed for failing to stem speculative lending that led to the crash, and some argued that inadequate understanding of monetary economics kept the Fed from pursuing polices that could have lessened the depth of the Depression.”
One of the people blaming the Fed was economist and monetary historian Milton Friedman. He criticized Fed policies for triggering the 1929 crash and then causing a depression that lasted over a decade.
“Throughout the contraction, the System [the Fed] had ample powers to cut short the tragic process of monetary deflation and banking collapse,” according to The Great Contraction 1929-1933, by Milton Friedman and Anna Schwartz.
To Fed critics, the Great Depression of 1929 and the great inflation of the 1970s were part of a series of policy blunders that happened again in 2008.
“There never would have been a subprime mortgage crisis if the Fed had been alert,” Schwartz told the Wall Street Journal. “This is something Alan Greenspan must answer for.”
In Greenspan’s memoir, The Age of Turbulence, the former Fed chairman conceded that Fed actions leading up to the crisis were dangerous. He wrote: “I was aware that the loosening of mortgage credit terms for subprime borrowers increased financial risk, and that subsidized home ownership initiatives distort market outcomes.” Still, Greenspan said he believes in the idea of every American having a home.
Economist Laurence Kotlikoff of Boston University says he’d give the Fed a C grade in its first century.
“It didn’t prevent the Great Depression or the Great Recession. It hasn’t fixed the core problems: opacity and leverage in the banking system,” Kotlikoff said.
“Central banking has a poor record but other methods do as well,” adds Jeffrey Gundlach, the manager of the Doubleline Total Return Bond Fund, which invests in mortgage backed securities. Gundlach has been very critical of cheap money policies of the Fed and predicted the crash of 2008. He believes the government should balance the budget first and then consider the Fed’s future.
Other critics, in reviewing the Fed’s record are harsher. They say it is time to end the Fed, in part because it favors certain banking interests.
“The Fed is an instrument of crony capitalism,” warns Hunter Lewis, a money manager and the co-founder of Cambridge Associates, an investment advisory firm.
“The Fed should be abolished because its legal monopoly of the money supply renders it an inherently inflationary institution able to create money at will and without limit,” says Salerno, noting that the value of a 1913 dollar is now five cents.
“History and current experience,” Salerno adds, “reveal to us that groups endowed with a legal monopoly over any area of the economy are prone to use it to the hilt to enrich themselves, their friends and allies.”
The Hunger Games and the Moral Imagination – Ludwig von Mises Institute Canada
The Hunger Games and the Moral Imagination – Ludwig von Mises Institute Canada.
This past weekend I caught The Hunger Games: Catching Fire at my local theater. The movie is based on the second part of a dystopian trilogy written by Suzanne Collins. In Collins’s fictional world known as Panem, a despotic government rules over all with a violent iron fist. There is a strict separation between the political class and the rest of the populace, with the latter working in slave-like conditions to support the former. The story focuses on protagonist Katniss Everdeen and her struggle to protect her loved ones while surviving the tyranny of her brutal overlords.
Throughout Catching Fire, the subject of revolution is paramount. Since the first instalment of the series when Katniss bested her oppressive dictators in the highly-publicized, annual fight-to-the-death tournament, she has become a symbol of agitation to the people. They look to her as a chink in the government’s armor – a sign that tyranny is not immortal but can be damaged. The plebs and their desire for freedom results in riots in the streets with vicious crackdowns from Orwellian-named “peacekeepers” who maintain tranquility with the bloodied end of truncheons. At one point during Katniss’s victory tour, an older gentleman raises his hand in defiance of the regime and whistles the popularized tune of revolution. He is summarily executed on the spot while the crowd that attempts to protect him is beaten handily.
The act of violence drew a startled and winced response from the movie audience. It was a demonstration of the horribly destructive nature of tyranny. There was no question as to the evilness of Panem’s dictatorial government. The line between enemy and hero was straight and untainted.
Stories such as the Hunger Games are wonderful things because they spark what conservative statesman Edmund Burke called the “moral imagination.” In his famedReflections on the Revolution in France, Burke chided the Jacobin revolutionaries for endeavoring to paint “the decent drapery of life” and the “moral imagination” as “ridiculous, absurd, and antiquated.” Russell Kirk expanded on this phrase and defined it as the “power of ethical perception which strides beyond the barriers of private experience and momentary events.”
Whether viewers know it or not, the basic plot of the Hunger Games series is an appeal to the moral imagination that men should be free from working as servants to others. It’s not exactly a new theme when compared to other modern movies. There are a multitude of storylines where a strong-willed protagonist finds the courage within themselves to fight off an authoritarian power, not alone, but with the help of others. The narrative follows a familiar pattern: while outgunned and outmanned, good ultimately triumphs over evil not so much because of one person but rather the hope for a better life embodied within a symbol.
The engrossing message of liberty over tyranny in the Hunger Games is thought to be why the franchise is so popular. In some ways, that is correct. People tend to have the urge of rooting for the underdog. When the abuser receives his just deserts, it’s seen as a representation of justice fulfilled.
But as great as the moral imagination is, it ultimately means nothing if it does not translate into real-life behavior modification. It’s one thing to cheer on a character on screen who is risking their life for a freer world. It’s another to embody that risk yourself in a reality that is slipping towards despotism.
Anyone who claims the post-apocalyptic setting in Hunger Games bears an uncanny resemblance to state control in our time is liable to be marked as a black helicopter-type. The ridicule is the same that was aimed, and still is aimed, at Friedrich Hayek after his great work The Road to Serfdom was released. “No,” the critics say, “the existence of the large welfare-warfare state has not translated itself to one world authoritarianism.” That is certainly true for now. Still, the general public finds it fun to mock the government as an over-bearing and inefficient behemoth while relying on the beast for a bi-weekly allotment of tax subsidies.
We may not be living hand-to-mouth while being forced to labor for thuggish overlords but the modern trend is clear: the political class is consuming more and more wealth-generating capital for themselves. It can be seen in highly-unionized European countries and within the bubble of richness known as the District of Columbia. The police state is ratcheting up its already untamed authority. Economic regulation is becoming more varied and intrusive. In the West, the state as an institution has been growing by leaps and bounds for over a century. Only an imbecile would deny this mass centralization in government power.
Yet most viewers of the Hunger Games will not let that message sink into their consciousness. They will not make the connection between a story and their own lives. It’s far too discomforting. At the same time, they will revere characters in a tale who come off as heroes. These fictional thought constructs are viewed as perfectly noble persons who sacrifice for the greater good. One would think the same reverence would be shown to those individuals who engage in the same art of defiance against what is generally deemed an unjust situation. If characters in fiction can be seen as courageous, why not real-life persons who display the same type of behavior?
Edward Snowden, the now-infamous whistleblower of the National Security Agency, is still seen as a dirty, rotten traitor by much of the public. It’s a strange cognitive dissonance that while a majority are irate over their government’s spying, they see the man who clued them in as some type of mendacious plotter who hates Uncle Sam. It’s equally as strange that the same folks who hardly bat an eye when calling Snowden a scumbag will just as quickly latch on to the fighter of injustice in a movie.
Stories provide valuable insight into the limits of mankind and what constitutes good. But they are not reality in the end. There is little risk in admiring a character in fiction who stands up for the right thing. Doing so in real-life is apt to bring ridicule, and thus has a social stigma attached to it.
It takes no spine to be a warrior on paper. It also requires little brain power to bend your will with that of an author’s. The science of critical thinking demands a logical and coherent approach to viewing issues. Criticizing someone for doing the very same action that you praise in make-believe land is inconsistent and a sign of poor judgment. The borderline between the real and the imagination does not render ethics and morality capricious. A proper way to live is to be transcendent of observable examination alone.
Hunger Games contains a pertinent message to those living under big government. The heroes and villains of the story should not be unfamiliar to current events. Edward Snowden is a real life Katniss Everdeen. He defied the powers-that-be in order to do what he believed was right. But instead of receiving praise, he got condemnation from voices normally wary of statism. The irony remains that the same men and women who call Snowden a traitor should be cheering for the tyrannical government of Panem to squash the rebellion and restore its oppressive hold on society. Of course, that suggestion sounds crazy, but then so does the person who pays lip-service to freedom while cheering for the death of someone who risks their life for greater liberty. Their moral imagination is in great need of fine-tuning.
James E. Miller is editor-in-chief of the Ludwig von Mises Institute of Canada. Send him mail
Tags: Edmund Burke, Edward Snowden, Hunger Games, moral imagination, NSA, Russell Kirk
Ron Paul’s Texas Straight Talk
Ron Paul’s Texas Straight Talk.
Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”
As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!
It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.
By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!
As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.
Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.
Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.
Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.
Permission to reprint in whole or in part is gladly granted, provided full credit is given.