The Federal Reserve, with its money-pumping machine distorting credit markets and interest rates, along with creating piles of debt among the citizenry, is a totalitarian and destructive force. The Fed destroys time preferences because it turns people into consumption-oriented, gotta-have-it-now debt addicts. The Fed has wrecked the housing market and turned homes into leveraged bets. The Fed has sucked people into revolving debt, student loan debt, and miscellaneous personal debt, all with the promise that the boom was never going to end. The Fed perverted the stock market, baiting pension funds, 401k funds, and personal investments, and thus has wiped out much of the wealth of American retirees and the middle class. The Fed has turned the latest generation of children into a consumption-only class who do not know of the production side of the market, nor do they care. The Fed has established a financial dependency on government that has destroyed the self-sufficiency of an entire generation. Today's bread and circuses is tomorrow's lack of saving, invention, and production. The Federal Reserve is a criminal organization and the destroyer of lives.
The latest victim of this system that takes Americans captive is the man who shot his wife and three children to death before committing suicide in Middletown, Maryland. He was $460k in debt on a mortgage and credit cards on a salary of less than $100k per year. The debt, dependency, and financial disintegration drove him crazy. Here is Guido Hulsmann from one of my all-time favorite articles, "The Cultural and Spiritual Legacy of Fiat Inflation."
The net effect of the recent surge in household debt is therefore to throw entire populations into financial dependency. The moral implications are clear. Towering debts are incompatible with financial self-reliance and thus they tend to weaken self-reliance also in all other spheres. The debt-ridden individual eventually adopts the habit of turning to others for help, rather than maturing into an economic and moral anchor of his family, and of his wider community. Wishful thinking and submissiveness replace soberness and independent judgement. And what about the many cases in which families can no longer shoulder the debt load? Then the result is either despair or, on the contrary, scorn for all standards of financial sanity.
Thursday, April 23, 2009
The Devistation of the Fed
I found this piece this morning on my RSS feed from the Mises Institute Blog. This article is from Karen De Coster. I thought it seemed fitting after my last post because it points out the real life effects of having the Federal Reserve's central planning:
Wednesday, April 22, 2009
The Fed
We hear from way too many in the media saying that the markets being too free is what has caused the problems in the economy. This is an absurd assertion and can not be stood for. Freedom has not failed. It hasn't even been given a chance.
I mentioned in a previous post about how our government's tax system has hindered economic progress. In this post I would like to point out how government intervention through the Federal Reserve, not freedom, has played a huge part in the problems we are having in the economy.
While the Federal Reserve (Fed) is a "private" organization, it was started by the federal government in 1913 through the Federal Reserve Act and its Board of Governors are appointed by the president (therefore, it is really a government organization with private components). It is a central banking system for the U.S. that controls our monetary policy and interest rates.
Interest rates are the price we pay for money. In a free system of banking, interests rates would be set by the simple rule of supply and demand. When people save their money in a bank, that bank builds up its reserves. Those reserves are what a bank uses to make loans. If the bank reserves are high it means a lot of people are saving their money for future consumption. This would make the supply of money that the bank has to loan high and the demand for current consumption low, which would make interest rates low. On the other hand, if the demand for current consumption rises it mean less savings, less reserves on hand at the bank, and, thus, less supply of money. This would, by the same law of supply and demand, cause the interest rates, the price of money, to go up.
What has the Fed done to this system? It has destroyed the free market's system for controlling the price of money by arbitrarily setting interest rates to whatever is politically feasible at the time. The theme that I have heard growing up is that consumer spending is what makes the economy go round. Well, this is the false pretense that the Fed works under. So, with this mantra, the Fed sets interest rates arbitrarily low in order to give people "credit" and get them to spend, or consume, now. This causes a boom, or bubble, in the economy. The problem with this is that no saving are there to back the credit driven spending boom up and eventually the bills come due. Unfortunately, many people's, and company's, bills are coming due now. They were enticed, by the Fed setting low interest rates, into irresponsible borrowing and spending and they don't have the savings to back it up. We are currently seeing this have devastating affects in the housing market.
Freedom would have prevented this. It would only be wise, in the free market, to borrow money when the supply of money is high. The supply of loanable money being high would indicate that people are holding off on spending till some time in the future. This would entice one to borrow money at a real low rate now in hopes of putting that money into a productive capacity so that others can consume what was produced with their savings later. On the other hand, if spending began to get too high and savings too low, the banks would then raise the interest rates. This would slow the borrowing of money for future production until the savings were there to back it up again.
Don't buy the propaganda from the political and media elite that tell us that free markets haven't worked and we need more regulation on freedom. That simply means they want to take more of your liberty and freedom from you. We can not stand for such.
We need to end the Fed and get back to sound money and free market principles. Let's give freedom a chance.
I mentioned in a previous post about how our government's tax system has hindered economic progress. In this post I would like to point out how government intervention through the Federal Reserve, not freedom, has played a huge part in the problems we are having in the economy.
While the Federal Reserve (Fed) is a "private" organization, it was started by the federal government in 1913 through the Federal Reserve Act and its Board of Governors are appointed by the president (therefore, it is really a government organization with private components). It is a central banking system for the U.S. that controls our monetary policy and interest rates.
Interest rates are the price we pay for money. In a free system of banking, interests rates would be set by the simple rule of supply and demand. When people save their money in a bank, that bank builds up its reserves. Those reserves are what a bank uses to make loans. If the bank reserves are high it means a lot of people are saving their money for future consumption. This would make the supply of money that the bank has to loan high and the demand for current consumption low, which would make interest rates low. On the other hand, if the demand for current consumption rises it mean less savings, less reserves on hand at the bank, and, thus, less supply of money. This would, by the same law of supply and demand, cause the interest rates, the price of money, to go up.
What has the Fed done to this system? It has destroyed the free market's system for controlling the price of money by arbitrarily setting interest rates to whatever is politically feasible at the time. The theme that I have heard growing up is that consumer spending is what makes the economy go round. Well, this is the false pretense that the Fed works under. So, with this mantra, the Fed sets interest rates arbitrarily low in order to give people "credit" and get them to spend, or consume, now. This causes a boom, or bubble, in the economy. The problem with this is that no saving are there to back the credit driven spending boom up and eventually the bills come due. Unfortunately, many people's, and company's, bills are coming due now. They were enticed, by the Fed setting low interest rates, into irresponsible borrowing and spending and they don't have the savings to back it up. We are currently seeing this have devastating affects in the housing market.
Freedom would have prevented this. It would only be wise, in the free market, to borrow money when the supply of money is high. The supply of loanable money being high would indicate that people are holding off on spending till some time in the future. This would entice one to borrow money at a real low rate now in hopes of putting that money into a productive capacity so that others can consume what was produced with their savings later. On the other hand, if spending began to get too high and savings too low, the banks would then raise the interest rates. This would slow the borrowing of money for future production until the savings were there to back it up again.
Don't buy the propaganda from the political and media elite that tell us that free markets haven't worked and we need more regulation on freedom. That simply means they want to take more of your liberty and freedom from you. We can not stand for such.
We need to end the Fed and get back to sound money and free market principles. Let's give freedom a chance.
Thursday, April 16, 2009
Hoover Tea Party
I attended the Hoover Tea Party last night and had a great time. I am very glad I got to meet, shake hands, and talk to a lot people out there.
The thing that I got out of the overwhelming majority of my conversations is that folks are really upset that both Democrats and Republicans are spending like crazy in Washington. I very much agree. I believe that most people realize that we have very little chance of changing our tax system with out stopping the out of control spending first.
People are tired of a two party system that is starting to look like a one party system. I think they see that both parties are just as guilty of out of control spending and they are tired of it. They are tired of seeing their futures going down the drain courtesy of the federal government. They are ready to take back their government, take back their futures, and take back the freedoms the government has taken from them. I hope to be the person to help that happen.
The thing that I got out of the overwhelming majority of my conversations is that folks are really upset that both Democrats and Republicans are spending like crazy in Washington. I very much agree. I believe that most people realize that we have very little chance of changing our tax system with out stopping the out of control spending first.
People are tired of a two party system that is starting to look like a one party system. I think they see that both parties are just as guilty of out of control spending and they are tired of it. They are tired of seeing their futures going down the drain courtesy of the federal government. They are ready to take back their government, take back their futures, and take back the freedoms the government has taken from them. I hope to be the person to help that happen.
Tuesday, April 14, 2009
The Income Tax
I think I made the point clear in my previous post that I am against the income tax system. The questions that should enter one's mind are "why" and "what would you do about it?"
"WHY?"
I will answer "why" in two ways. I will first try to show the impracticability of the income tax and then point out the immorality of the income tax.
IMPRACTICAL
The economy is in recession today because we have spent money like crazy and we didn't produce and save enough to back that spending spree up (the Federal Reserve and other government action perpetuated the spending spree, but I will lay my charge against them in other posts). So, we need more production and more savings in order to claw ourselves out of the mess we are in. What does the government do to help? It takes from its citizens the very income that they use to build the savings that is needed to help get us of this mess. How does that make sense?
IMMORAL
No one would think that it is morally OK for someone to steal their stuff no matter how "nobly" the thief put the looted goods to use. However, we seem to be OK with it when our government does the very same thing. It is flat out wrong for anyone to forcibly take the hard earned fruits of your labor, including the government.
Don't fool yourself. The fruits of your labor are taken from you with the threat of force. If you do not believe me, try not paying your taxes and tell me if people with or without guns and hand cuffs come to forcibly remove you from your home.
"WHAT WOULD YOU DO ABOUT IT?"
I would immediately seek to repeal the 16th Amendment. I would seek to eliminate all corporate and income taxes and all payroll taxes.
The question would then be "how could the government make any money?" If you look at the tax receipts from 2007 ($2,568.2 billion) and eliminated the corporate and income tax receipts from that number ($370.2 and $1,163.5 billion respectively) we would be sitting with more tax receipts than we had in 1990 ($1,032.1 billion). Was government just absurdly too small in 1990? I don't think so and my answer to "how could the government make money?" would be, it makes too much money as it is!!!
Now, the government still makes money through various other taxes such as Medicare and Medicaid taxes, Social Security taxes, and excise taxes. I would also seek to scrap these and replace them with what is know as the "FairTax" or a consumption based tax.
I will seek to explain my support for the FairTax in another post. However, I would like to mention that I think that the 23% sales tax rate under the FairTax is too high. The FairTax seeks to fund government at its current level. Well, the government's current funding level is too high. Therefore, government spending needs to be cut drastically so that the 23% sales tax rate can also be cut drastically.
My final answer to the question "what would you do about it?" is the same answer I hope to give to every question like it during the campaign, I just want give you, me, and everyone freedom! We desperately need to be freed from the oppression of the income tax system. We need to take action and take it now before the mess we are in gets out of control.
"WHY?"
I will answer "why" in two ways. I will first try to show the impracticability of the income tax and then point out the immorality of the income tax.
IMPRACTICAL
The economy is in recession today because we have spent money like crazy and we didn't produce and save enough to back that spending spree up (the Federal Reserve and other government action perpetuated the spending spree, but I will lay my charge against them in other posts). So, we need more production and more savings in order to claw ourselves out of the mess we are in. What does the government do to help? It takes from its citizens the very income that they use to build the savings that is needed to help get us of this mess. How does that make sense?
IMMORAL
No one would think that it is morally OK for someone to steal their stuff no matter how "nobly" the thief put the looted goods to use. However, we seem to be OK with it when our government does the very same thing. It is flat out wrong for anyone to forcibly take the hard earned fruits of your labor, including the government.
Don't fool yourself. The fruits of your labor are taken from you with the threat of force. If you do not believe me, try not paying your taxes and tell me if people with or without guns and hand cuffs come to forcibly remove you from your home.
"WHAT WOULD YOU DO ABOUT IT?"
I would immediately seek to repeal the 16th Amendment. I would seek to eliminate all corporate and income taxes and all payroll taxes.
The question would then be "how could the government make any money?" If you look at the tax receipts from 2007 ($2,568.2 billion) and eliminated the corporate and income tax receipts from that number ($370.2 and $1,163.5 billion respectively) we would be sitting with more tax receipts than we had in 1990 ($1,032.1 billion). Was government just absurdly too small in 1990? I don't think so and my answer to "how could the government make money?" would be, it makes too much money as it is!!!
Now, the government still makes money through various other taxes such as Medicare and Medicaid taxes, Social Security taxes, and excise taxes. I would also seek to scrap these and replace them with what is know as the "FairTax" or a consumption based tax.
I will seek to explain my support for the FairTax in another post. However, I would like to mention that I think that the 23% sales tax rate under the FairTax is too high. The FairTax seeks to fund government at its current level. Well, the government's current funding level is too high. Therefore, government spending needs to be cut drastically so that the 23% sales tax rate can also be cut drastically.
My final answer to the question "what would you do about it?" is the same answer I hope to give to every question like it during the campaign, I just want give you, me, and everyone freedom! We desperately need to be freed from the oppression of the income tax system. We need to take action and take it now before the mess we are in gets out of control.
Taxes and Tea Parties
The 16th Amendment states:
I can not believe that this unbelievably oppressive statement is staining our Constitution! What hubris that came out of Washington DC in the early 1900's to draft such a thing. Did you happen to notice that this amendment puts NO limit on the amount of our income the government can take? So, 100% of the fruits of your labor can LEGALLY be stolen from you by our federal government. It needs to be removed from our Constitution immediately.
Now I realize it is quite a lofty thought. Radical things would have to happen in our government for them to relinquish the power that the 16th Amendment grants them.
However, there is hope. The only way for something radical to happen in government is for the governed to make something radical happen in its government (if you don't believe it can happen, I would simply refer you to our Declaration of Independence and the Revolutionary War). I see a glimmer of hope in the events that will be taking place all over the country tomorrow, April 15th. "Tea Parties." This is a great step to show our government that we are for real about changing the oppressive income tax system. However, these events can not be backed by hollow or empty speech. It needs to be backed by action.
Our actions need to have the effect of putting people in our government for REAL change. Change that gets the government out of the job of looting its citizens. Change that gets government out of the job of spying on all of our financial transactions. Change that brings us back to honoring the Constitution and change that removes the filth of the 16th Amendment from our lives, forever!
I hope you attend a Tea Party near you. I will be attending the one in Hoover AL. Lets be agents for REAL change and fight back against the ever growing, ever oppressive government we have put up with for far too long.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration
I can not believe that this unbelievably oppressive statement is staining our Constitution! What hubris that came out of Washington DC in the early 1900's to draft such a thing. Did you happen to notice that this amendment puts NO limit on the amount of our income the government can take? So, 100% of the fruits of your labor can LEGALLY be stolen from you by our federal government. It needs to be removed from our Constitution immediately.
Now I realize it is quite a lofty thought. Radical things would have to happen in our government for them to relinquish the power that the 16th Amendment grants them.
However, there is hope. The only way for something radical to happen in government is for the governed to make something radical happen in its government (if you don't believe it can happen, I would simply refer you to our Declaration of Independence and the Revolutionary War). I see a glimmer of hope in the events that will be taking place all over the country tomorrow, April 15th. "Tea Parties." This is a great step to show our government that we are for real about changing the oppressive income tax system. However, these events can not be backed by hollow or empty speech. It needs to be backed by action.
Our actions need to have the effect of putting people in our government for REAL change. Change that gets the government out of the job of looting its citizens. Change that gets government out of the job of spying on all of our financial transactions. Change that brings us back to honoring the Constitution and change that removes the filth of the 16th Amendment from our lives, forever!
I hope you attend a Tea Party near you. I will be attending the one in Hoover AL. Lets be agents for REAL change and fight back against the ever growing, ever oppressive government we have put up with for far too long.
Wednesday, April 8, 2009
Our Spending Problems
Our government is driving our economic futures into the ground. It is putting an ENORMOUS burden of debt on our younger generations in the name of political expedience. It is showing unbelievable arrogance in its thinking that it can manage our financial systems and the market as a whole better than its people can. This is laughable when one considers that our government shows ZERO efficiency in managing its own affairs. A debt that is growing $3.85 Billion per day doesn't exactly scream "we know what we're doing lets help you."
That is precisely the problem, the government doesn't know what its doing. The government can't possibly know how to manage the production of resources because it produces NO resources of its own. The only resources government attains are the resources it attains by looting its citizens.
There is enough blame to go around between the congress and the Executive Branch for the growing mess that we are in. However, I would like to focus on the congress for this discussion. Article I section 9.7 of the Constitution, dealing with the Legislative Branch, states, "No money shall be drawn from the treasury, but in consequence of appropriations made by law..." Congress has simply neglected this Constitutional duty of theirs. Instead, they always seem willing to shift that Constitutional duty over to the Executive Branch, which then appropriates funds to wasteful bureaucracies. This can not be stood for. The reasoning behind giving congress the duty of appropriating where our money should go is to put that duty in the hands of the branch of government most representative of the people. This gives more power to the will of the people as opposed to the will of wasteful bureaucrats.
When in the House, I will not vote for any budget proposal that does not seek to cut federal spending by a substantial percentage year over year. I will not vote for a single spending bill that is a hair's breadth over what is Constitutionally allowed. I will seek to do the only thing that government can do to help its people, GET OUT OF THE WAY!!!!!! All I want for all of us is FREEDOM!!!
Monday, April 6, 2009
A Test of Support
I am starting a blog in hopes of seeking support in my upcoming run for congress in 2010. I hope to periodically post about my political views and post my views on some current events that affect our nation.
Being as this is my opening post, I feel the need to give a little information on my political views. I believe I can do this with one word, FREEDOM. I am very concerned about the way that government has got its hand on so much that we do. The more the government acts in our lives the more our liberties fall to the wayside. My priority in congress would be to bring our government back to the size our founders intended it to be, "Constitution sized."
Being as this is my opening post, I feel the need to give a little information on my political views. I believe I can do this with one word, FREEDOM. I am very concerned about the way that government has got its hand on so much that we do. The more the government acts in our lives the more our liberties fall to the wayside. My priority in congress would be to bring our government back to the size our founders intended it to be, "Constitution sized."
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