|
Getting your Trinity Audio player ready...
|
by RON PAUL
According to data collected by the research firm Statista, 29 percent of Americans cannot afford to take a vacation this year. A vacation is not the only thing Americans are struggling to afford. The failure of wages to keep up with price inflation is why household debt hit a record level of $18.4 trillion this year, with the average household owing more than $100,000.
The Federal Reserve is responsible for the decline in American living standards and the rise in income inequality. The turning point in the people’s economic fortunes was on August 15, 1971. That is when then-President Richard Nixon closed the “gold window,” severing the last link between the dollar and gold. This left America with a purely fiat currency and no restraint on the Federal Reserve’s ability to create money.
When the Federal Reserve pumps money into the economy the new money is not equally distributed. It first goes to wealthy and well-connected individuals. These individuals benefit from having increased purchasing power before the new money has caused price increases.
***
The Fed also contributes to economic instability and inequality by creating bubbles that distort the signals sent by the market. This causes over-investment in some sectors. When bubbles burst, workers employed in certain sectors lose their jobs, while those at top often suffer at most a modest setback. The government bails out the “too big to fail” corporations, but the government never considers workers and homeowners too big to fail.
The Federal Reserve facilitates the growth of the welfare-warfare state by purchasing Treasury bonds, thus monetizing federal debt. The majority of government spending is on programs benefiting powerful special interests. This includes in large part the military-industrial complex that gobbles up more money from the government each year.
The Federal Reserve’s continued devaluation of the dollar to finance an empire abroad and a welfare state at home is the driving force behind the erosion of the people’s living standards. As the dollar loses purchasing power, demand for government assistance increases, leading to more government spending, more debt monetization, and a further decline in living standards.
***
RELATED | SNAP SAGA: DONALD TRUMP REBUKES PARTIAL PAYOUT
***
The fact that almost a third of Americans cannot afford a vacation illustrates how fiat money harms average Americans. Continued growth of federal debt and Fed-created inflation will lead to a major economic crisis. This will either induce or be caused by a rejection of the dollar’s world reserve currency status.
The result will be a rise of demagogic authoritarians of both left and right and increased political violence, leading to an increase in government repression.
Those of us who know the truth must continue to explain that the solution to our problems is a vacation from the welfare-warfare state and the fiat money system that facilitates government growth at the expense of the people’s standards of living and liberty. Limited government, free markets, and peaceful relations and free trade with as many nations as possible are components of the path to lasting peace and prosperity.
***
ABOUT THE AUTHOR…
Ron Paul is a former U.S. Congressman from Texas and the leader of the pro-liberty, pro-free market movement in the United States. His weekly column – reprinted with permission – can be found here.
***
WANNA SOUND OFF?
Got something you’d like to say in response to one of our articles? Or an issue you’d like to address proactively? We have an open microphone policy! Submit your letter to the editor (or guest column) via email HERE. Got a tip for a story? CLICK HERE. Got a technical question or a glitch to report? CLICK HERE.
2 comments
With the massive drop in foreign tourists thanks to a certain complete imbecile’s policies, you would think that it would be easy pickings to find a great deal from all the desperate tourist destinations within our borders.
Alas, Trump’s reverse-Midas touch has instead turned almost everything to crap.
There is another thing we as a people have to squarely face. In the main, as a nation, we Americans tend to live above our means and fail to save for hard times and retirement. We want 4 huge flat screen TVs, a house a third to twice as large as the average home in our parents’ generation. We want that new car when the one we have still has several good years on it – and we finance the new car over 7 years with only 1k down in cash. We don’t mind carrying 20k in credit card debt more or less perpetually. We put vacations, birthday presents and Christmas on the credit card, having no idea where the money is going to come from to pay it. Every few years, we refinance our home to pay off those credit cards and then do it all over again. Sure, our government is far, far worse, but a big reason why it is so bad is because it is just a larger, aggregated reflection of our own attitudes. We want to cut spending but no-one ever gets mad when their congressman or senator brings home millions in pork projects for their district or state. There has been a reversal trend – somewhat- in a significant portion of our society that started after the Great Recession, but it is a stark minority of our population. Until we as a people start changing our own choices and attitudes at home, this will never go in the right direction.