President Ronald Reagan said the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.” The federal government, the Federal Reserve and banking special interests caused U.S. currency to plummet and prices to soar.
Americans must buy necessities that cost more with dollars that are worth less. Our dependent class demands that government and banks do something to help. History and economics show that these entities help themselves.
Our Founders asserted that people are endowed with “unalienable rights” that include “Life, Liberty and the pursuit of Happiness.” The Constitution gives our government the power to guarantee our rights, but limits it to a representative republic intended to reflect the will of the people. Limits on government interference allow responsibility and an entrepreneurial spirit to stimulate creativity and innovation. Free enterprise leads to cooperative trade that creates prosperity and benefits our entire society.
The Constitution authorized Congress to “coin” money (Article 1.8.5); not to print a fiat paper currency. Our forebears canceled the charters of early central banks because they understood autonomous control of capital would foster government growth and enrich special interests. The Founders were wary of excessive taxes and prohibited a federal income tax (Article 1.9.4). Limits on central government keep the people free to make choices for their economic betterment, which enhances opportunity for all.
In 1913, economic control was wrested away from the people. The Federal Reserve (the Fed), a group of private banks with no reserves, was created to control production and distribution of money and credit. The 16th Amendment then bestowed Congress with the power to assess income tax. Government had a new source of “free” money. It began printing bonds to give the Fed in exchange for magically minted dollars that aren’t backed by gold. Income tax levied on citizens pays interest to the Fed on the “loans.”
Manufactured money allowed government to “help” dependent Americans with Social Security, Medicare, Medicaid, welfare, unemployment, Fannie Mae and Freddie Mac. Since 2007, the Fed has engaged in quantitative easing, creating more fiat money to buy mortgage-backed securities and other toxic debt from banks. In less than 10 years, over $5 trillion was simply dropped into circulation. Cumulative inflation since 1913 is now over 2,370 percent. Our dollars are worth 1/25 of their 1913 value.
Recommended Stories For You
While our spending power goes down, our cost of living goes up. Commodities are raw or primary, physical products used to produce everything from food to fuel. In the 1980s, investment banks like Goldman Sachs and Morgan Stanley started buying trading firms that held seats on the commodity exchanges. By the mid-1990s, a monopoly of investment banks controlled speculative investment of commodities and owned much of the infrastructure to store and transport these raw materials.
Congress then passed laws requiring big money, like state pension funds, to diversify investments. Banking special interests pitched Commodity Index Investing to fund managers needing to comply. From 2003 to 2008, speculative investments in commodities increased from $13 billion to $317 billion. The massive influx of money caused the average price of raw goods to rise 200 percent. Actual industrial consumers add the expense into higher prices of manufactured products for families and businesses.
Ultimately, government, the Fed and big banks caused the global financial crisis of 2007-08. Millions of individuals, families and businesses suffered devastating financial losses. The government/media matrix blamed the crisis on failure of the free enterprise system, piggish consumers and greedy corporations. Our dependent class was eager for government to come to the rescue with new and expanded social programs. We pay the price while the elite accumulate more wealth and power.
Americans allowed government to expand power far beyond constitutional limits. We tolerate a banking monopoly that controls our currency and economy. The cost of our complacency is massive debt, devalued dollars, rising prices, high taxes and excessive regulations. We let it happen because media buzzwords, like “addiction to oil” and “carbon footprint” incite guilt for adherence to constitution law, preservation of America’s founding principles and the pursuit of prosperity.
Centuries of economic data show the greatest prosperity for the most people is created by free enterprise. But when citizens are unencumbered to exercise free choice for their economic betterment, power is dispersed. Throughout history, the political and economic elite have sought to maximize their wealth and power by limiting the free choices of individuals. Modern times are no different. When government and its accomplices arrive during economic calamities, they’re here to help themselves.
James D. Kellogg is an engineering consultant, author, and business system advocate. He is the founder of RadicalActionForLife.com and the author of “Radical Action: A Colt Kelley Thriller.” Look for the novel on amazon.com and visit JamesDKellogg.com or email email@example.com.