By ROBERT J. SAMUELSON Posted 09/29/2009 06:11 PM ET
What’s driving the great health debate of 2009 is not a popular clamor for universal insurance.
“Many Americans are balking again at the prospect of health care reform,” writes pollster Andrew Kohut of the Pew Research Center.
A new Wall Street Journal poll found 41% of respondents opposed to President Obama’s proposals and 39% in favor (the rest were undecided). The underlying driver is politicians’ psychological quest for glory.
President Obama on January 29,2009 signed into law the Lilly Ledbetter Bill and made remarks that included “…..it’s bad for business to pay somebody less because of their gender or their age or their race or their ethnicity, religion or disability; and that justice isn’t about some abstract legal theory, or footnote in a casebook. It’s about how our laws affect the daily lives and the daily realities of people: their ability to make a living and care for their families and achieve their goal.”
I don’t know a lot about this bill, I don’t know Lilly Ledbetter, and I don’t know why this legislation was passed, but I still have some thoughts I’d like to share.
All people working for the same person, doing the same job – same duties, same shifts, etc. – should be paid the same hourly wage.
I believe that for the most part, that is done. Everyone knows that two people don’t do anything identically, including their jobs. The person who does his job well and to the best of his ability is of greater value to the company than is a less dedicated employee, and I believe that most “discrimination” results from raises given to some, bonuses given to some, and some not receiving either . If that is the case, and discrimination raises its ugly head, the issue should get a really good inspection, and if it is found that the worker getting more was a more valuable employee, I think it should be the company’s decision to reward the more valuable employee without fear of any reprisal whatsoever. Was this bill truly the result of widespread discrimination against women, or was it a feel-good piece of legislation for the government to be able to toot its own horn at the expense of private businesses?
Let’s address the handicapped and employment. There are some jobs certain handicaps preclude their victims from doing, and this is not the fault of the business. If a handicapped person can handle the job as well as the next person without causing extra cost or stress in the workplace, he should be hired, if the employer wants him, at full pay, whatever it may be. There is no justification for paying less. If the employee sees he cannot adequately do the job, he should approach the business manager and ask about being placed somewhere else, and if not, he probably should resign and look for work he in fact can do. If the owner learns after hiring the handicapped person that he is not capable of doing the job, he is, in my opinion, well within his rights to fire the person or demote him as he didn’t live up to the agreement made at the time of hiring.
Let it be known I am NOT an employer, nor am I an employee. I feel that employers have for many years been treated terribly bad by their own government. Their government bows to unions in order to get votes while stabbing employers in the back. In addition to that , in order to get the minority vote, the handicapped vote, the women’s vote, the poor vote, our dear politicians have enacted some of the most convoluted self-serving “laws” imaginable hence, everything has become so politically incorrect that an employer probably has to carry a check list with him at all times to not offend this employee, that employee, etc.
We have had bad governments before, several times, but the one that exists today cannot be beaten when it comes to sleaze, pork, theft of public funds, irresponsible legislation that defies the US Constitution, and that ridicules and chastises the citizens of this country for expressing their views.
Let me close by just saying that I will be forever grateful that I am not an employer, not an entrepreneur, not in big business. Not because they are not noble, but because their government has incited so much hatred directed at them for no purpose other than to get a dirty, bloody vote that were I they, I’d do an Ayn Rand on them.
I bring up a brief discussion on the nature of inflation in response to possibly one of the most foolish articles I have seen lately. At Seeking Alpha, Henry Bee writes that Auditing the Fed is Economic Suicide. In an incredible feat of intellectual gymnastics, Bee lays down the accusation that somehow the public knowing what is happening with the money supply will be the end of the free market:
The free market understands that auditing the fed is a very dangerous line to cross. If crossed, U.S. inflation will likely skyrocket over the next decade to unseen levels. U.S. economy tanks. Bond investors lose money as interest rates rise. Stock investors earn negative real return as equity risk premium rises and aggregate PE ratio tank. The US Dollar erodes due to higher domestic inflation relative to foreign inflation. Gold and commodity prices rise.
Perhaps we can forgive Mr. Bee for being Canadian, and therefore not understanding the history of the Federal Reserve and monetary policy in the United States. Or perhaps we can direct him to the aforementioned Milton Friedman, or maybe Murray Rothbard, or F.A. Hayek, for some simple education on monetary policy. Remember, “gold and commodity prices rise” only in terms of the value of the money itself. They are physical, tangible things. They always retain the same value, and it is the value of the money itself that changes due to inflation. After beginning with the Vault, Bee continues and moves on to the Balance Beam:
How Does Auditing the Fed Cause Inflation?
Inflation is caused by a central bank that loses control of its money supply. There are two ways that a politically compromised central bank can lose control of its money supply.
I’ll interrupt Mr. Bee while he’s still doing some of his simple posing, and before he really gets going with the tumbling. Inflation is caused by a central bank that loses control of its money supply? I think not. Remember, inflation is always and everywhere a monetary phenomenon. Inflation is caused by the introduction of more money into the supply. Who introduces more money into the supply? The central bank. The Federal Reserve is our central bank. Incidentally, Mr. Bee might be interested to know that since its inception, the Federal Reserve has practiced nothing but inflationary monetary policy and, in about 100 years, has managed thereby to devalue the dollar by approximately 97%. It would seem then, that the Federal Reserve itself has been the cause of inflation all along. But I will allow Mr. Bee to continue:
Road to Inflation #1: Repeating the Political Cycle
When the central bank is not independent, politicians have historically pumped up the money supply (for temporary economic boost) shortly before an election to buy votes with a lower unemployment rate. After the election, the effects wear off, returning the economy to its natural rate of unemployment but at a higher inflation rate than before. Because it is hard to fight off inflation quickly, by the time the next election rolls around the economy has not been squeezed back to its original inflation rate. Politicians pump up the money supply again, this time from a higher base inflation. As this cycle repeats itself, the central bank loses control of the money supply.
Bee makes a good point here in defending the separation of church bank and state. However, akin to a balance beam backflip, Bee here asserts that an audit of Federal Reserve will allow politicians direct control of the money supply. Since the discussion surrounding HR 1207 has been one of simply getting a look at the books, Bee’s arguments, while valid conceptually, are unfounded in reality. Indeed, both Barney Frank and Ron Paul have agreed with Bee’s own argument, and intend to be disciplined in making the audit one that trails real time by enough that exactly what Bee purports to be the danger will not happen.
That said, I would like to ask Mr. Bee a simple question. What makes you suppose, Mr. Bee, that the Federal Reserve is not already unduly influenced by politicians? As I have explained in the past, the Fed is largely a conglomeration of private banking institutions, overseen by a Board of Governors, headed by the Chairman of the Federal Reserve, currently Ben Bernanke. The Board of Governors is a seven-member panel appointed by the President of the United States. This means, Mr. Bee, that seven people who, through their appointment, answer to the President, and the President alone, control all that is our monetary policy, all that is our money supply, and therefore all that is our inflation. If Ben Bernanke and six others answer only to the President, how exactly is the Federal Reserve not influenced by politics in the manner you suggest already?
Bee goes on to discuss a second road to inflation:
Road to Inflation #2: Financing Government Spending
A central bank that lacks independence from politicians makes it tempting for the government to finance an inappropriately large portion of its spending through printing money. A central bank that promises to finance too much government spending also loses control of the money supply.
Now honestly, there is only just so much we can forgive of Mr. Bee for his being Canadian. This really represents a complete lack of attention to current events. Inside of a four month period, the Federal Reserve just financed a $700 billion bailout of the US Financial industry through TARP, an effort, mind you, that resulted in all that money going to the noble purpose of, well, nobody really knows, followed by the $800 billion stimulus package. Based on Barney Frank’s admission in the video found in this post, Ben Bernanke indicated to him when the bailouts began with AIG, that he had $800 billion to play with. Well that covered TARP. The only logical inference then is that the Fed printed the rest to finance the stimulus. Our central bank is already following this road, Mr. Bee. The only question is, how much have they inflated the money supply?
Well the answer from the Fed has been, to this point, simple. Silence.
When seven men who answer to one man control the entire money supply, and hold no accountability, they can do as they please. Adding a check to this highly centralized power by making their actions transparent to the public cannot be a bad thing.
GetLiberty.org >> Editorial: The Leaderless Revolution.
A revolution is taking place in America. It’s as intangible as the whispering wind. Yet as ineluctable as mounting gale. To the politicians, it’s still but a passing breeze rustling the hair at the nape of the neck. To the grassroots masses, it’s rushing torrent destined to sweep the elite from the Halls of Power.
America is at the very incipience of a Leaderless Revolution. One could see it at the hometown Tea Parties disclaimed by politicians as ragtag assemblies and disdained by Barack Obama who speciously claimed not to have even known they even occurred. One can sense it in the polls, as one after another shows plunging support for this president and his policies.
And one can hear it loud and clear in the angry outpourings at “Town Hall” meetings where sputtering politicians are driven from the podiums and forced to seek shelter behind a phalanx of guards. continue reading…
Human life requires action, so it logically follows that humans must take those actions necessary to sustain their lives. We also acknowledge a corollary: Actions cease to be legitimate when they deny others the freedom to act.
This is a very well-written article, no ranting or screaming, just Reason.
Direct non-digg url: http://www.seacoastonline.com/articles/20090426-OPINION-904260324
Nobody wants to mention tax rises just ahead of the elections,” said Thorolfur Matthiasson, an economics professor at the University of Iceland. “But if the budget deficit is 10 percent of GDP and the official debt is approximately what the nation can produce in one year, then the politicians will have to raise tax and reduce public spending.
Striker
It’s hard to pay attention to what’s happening in such a seemingly small, remote and insignificant country as Iceland, but the parallels of retro-progress in Iceland and USA are stunning and terrifying. Think for a moment, this is a part of global collapse begun here in our USSA with the last trigger on this shotgun being the CRA. Then note our Rulers now considering renewal of the CRA to cure the problems caused by the CRA.
Please read this article and review the Digg comments.
It is important to keep in mind the difference between a Democracy and a Republic, as dissimilar forms of government. Understanding the difference is essential to comprehension of the fundamentals involved.
Following is the complete article from Original URL
It is important to keep in mind the difference between a Democracy and a Republic, as dissimilar forms of government. Understanding the difference is essential to comprehension of the fundamentals involved. It should be noted, in passing, that use of the word Democracy as meaning merely the popular type of government–that is, featuring genuinely free elections by the people periodically–is not helpful in discussing, as here, the difference between alternative and dissimilar forms of a popular government: a Democracy versus a Republic. This double meaning of Democracy–a popular-type government in general, as well as a specific form of popular government–needs to be made clear in any discussion, or writing, regarding this subject, for the sake of sound understanding.
These two forms of government: Democracy and Republic, are not only dissimilar but antithetical, reflecting the sharp contrast between (a) The Majority Unlimited, in a Democracy, lacking any legal safeguard of the rights of The Individual and The Minority, and (b) The Majority Limited, in a Republic under a written Constitution safeguarding the rights of The Individual and The Minority; as we shall now see.
A Democracy
The chief characteristic and distinguishing feature of a Democracy is: Rule by Omnipotent Majority. In a Democracy, The Individual, and any group of Individuals composing any Minority, have no protection against the unlimited power of The Majority. It is a case of Majority-over-Man.
This is true whether it be a Direct Democracy, or a Representative Democracy. In the direct type, applicable only to a small number of people as in the little city-states of ancient Greece, or in a New England town-meeting, all of the electorate assemble to debate and decide all government questions, and all decisions are reached by a majority vote (of at least half-plus-one). Decisions of The Majority in a New England town-meeting are, of course, subject to the Constitutions of the State and of the United States which protect The Individual’s rights; so, in this case, The Majority is not omnipotent and such a town-meeting is, therefore, not an example of a true Direct Democracy. Under a Representative Democracy like Britain’s parliamentary form of government, the people elect representatives to the national legislature–the elective body there being the House of Commons–and it functions by a similar vote of at least half-plus-one in making all legislative decisions.
In both the Direct type and the Representative type of Democracy, The Majority’s power is absolute and unlimited; its decisions are unappealable under the legal system established to give effect to this form of government. This opens the door to unlimited Tyranny-by-Majority. This was what The Framers of the United States Constitution meant in 1787, in debates in the Federal (framing) Convention, when they condemned the “excesses of democracy” and abuses under any Democracy of the unalienable rights of The Individual by The Majority. Examples were provided in the immediate post-1776 years by the legislatures of some of the States. In reaction against earlier royal tyranny, which had been exercised through oppressions by royal governors and judges of the new State governments, while the legislatures acted as if they were virtually omnipotent. There were no effective State Constitutions to limit the legislatures because most State governments were operating under mere Acts of their respective legislatures which were mislabelled “Constitutions.” Neither the governors not the courts of the offending States were able to exercise any substantial and effective restraining influence upon the legislatures in defense of The Individual’s unalienable rights, when violated by legislative infringements. (Connecticut and Rhode Island continued under their old Charters for many years.) It was not until 1780 that the first genuine Republic through constitutionally limited government, was adopted by Massachusetts–next New Hampshire in 1784, other States later.
It was in this connection that Jefferson, in his “Notes On The State of Virginia” written in 1781-1782, protected against such excesses by the Virginia Legislature in the years following the Declaration of Independence, saying: “An elective despotism was not the government we fought for . . .” (Emphasis Jefferson’s.) He also denounced the despotic concentration of power in the Virginia Legislature, under the so-called “Constitution”–in reality a mere Act of that body:
“All the powers of government, legislative, executive, judiciary, result to the legislative body. The concentrating these in the same hands is precisely the definition of despotic government. It will be no alleviation that these powers will be exercised by a plurality of hands, and not by a single one. 173 despots would surely be as oppressive as one. Let those who doubt it turn their eyes on the republic of Venice.”
This topic–the danger to the people’s liberties due to the turbulence of democracies and omnipotent, legislative majority–is discussed in The Federalist, for example in numbers 10 and 48 by Madison (in the latter noting Jefferson’s above-quoted comments).
The Framing Convention’s records prove that by decrying the “excesses of democracy” The Framers were, of course, not opposing a popular type of government for the United States; their whole aim and effort was to create a sound system of this type. To contend to the contrary is to falsify history. Such a falsification not only maligns the high purpose and good character of The Framers but belittles the spirit of the truly Free Man in America–the people at large of that period–who happily accepted and lived with gratification under the Constitution as their own fundamental law and under the Republic which it created, especially because they felt confident for the first time of the security of their liberties thereby protected against abuse by all possible violators, including The Majority momentarily in control of government. The truth is that The Framers, by their protests against the “excesses of democracy,” were merely making clear their sound reasons for preferring a Republic as the proper form of government. They well knew, in light of history, that nothing but a Republic can provide the best safeguards–in truth in the long run the only effective safeguards (if enforced in practice)–for the people’s liberties which are inescapably victimized by Democracy’s form and system of unlimited Government-over-Man featuring The Majority Omnipotent. They also knew that the American people would not consent to any form of government but that of a Republic. It is of special interest to note that Jefferson, who had been in Paris as the American Minister for several years, wrote Madison from there in March 1789 that:
“The tyranny of the legislatures is the most formidable dread at present, and will be for long years. That of the executive will come it’s turn, but it will be at a remote period.” (Text per original.)
Somewhat earlier, Madison had written Jefferson about violation of the Bill of Rights by State legislatures, stating:
“Repeated violations of those parchment barriers have been committed by overbearing majorities in every State. In Virginia I have seen the bill of rights violated in every instance where it has been opposed to a popular current.”
It is correct to say that in any Democracy–either a Direct or a Representative type–as a form of government, there can be no legal system which protects The Individual or The Minority (any or all minorities) against unlimited tyranny by The Majority. The undependable sense of self-restraint of the persons making up The Majority at any particular time offers, of course, no protection whatever. Such a form of government is characterized by The Majority Omnipotent and Unlimited. This is true, for example, of the Representative Democracy of Great Britain; because unlimited government power is possessed by the House of Lords, under an Act of Parliament of 1949–indeed, it has power to abolish anything and everything governmental in Great Britain.
For a period of some centuries ago, some English judges did argue that their decisions could restrain Parliament; but this theory had to be abandoned because it was found to be untenable in the light of sound political theory and governmental realities in a Representative Democracy. Under this form of government, neither the courts not any other part of the government can effectively challenge, much less block, any action by The Majority in the legislative body, no matter how arbitrary, tyrannous, or totalitarian they might become in practice. The parliamentary system of Great Britain is a perfect example of Representative Democracy and of the potential tyranny inherent in its system of Unlimited Rule by Omnipotent Majority. This pertains only to the potential, to the theory, involved; governmental practices there are irrelevant to this discussion.
Madison’s observations in The Federalist number 10 are noteworthy at this point because they highlight a grave error made through the centuries regarding Democracy as a form of government. He commented as follows:
“Theoretic politicians, who have patronized this species of government, have erroneously supposed, that by reducing mankind to a perfect equality in their political rights, they would, at the same time, be perfectly equalized and assimilated in their possessions, their opinions, and their passions.”
Democracy, as a form of government, is utterly repugnant to–is the very antithesis of–the traditional American system: that of a Republic, and its underlying philosophy, as expressed in essence in the Declaration of Independence with primary emphasis upon the people’s forming their government so as to permit them to possess only “just powers” (limited powers) in order to make and keep secure the God-given, unalienable rights of each and every Individual and therefore of all groups of Individuals.
A Republic
A Republic, on the other hand, has a very different purpose and an entirely different form, or system, of government. Its purpose is to control The Majority strictly, as well as all others among the people, primarily to protect The Individual’s God-given, unalienable rights and therefore for the protection of the rights of The Minority, of all minorities, and the liberties of people in general. The definition of a Republic is: a constitutionally limited government of the representative type, created by a written Constitution–adopted by the people and changeable (from its original meaning) by them only by its amendment–with its powers divided between three separate Branches: Executive, Legislative and Judicial. Here the term “the people” means, of course, the electorate.
The people adopt the Constitution as their fundamental law by utilizing a Constitutional Convention–especially chosen by them for this express and sole purpose–to frame it for consideration and approval by them either directly or by their representatives in a Ratifying Convention, similarly chosen. Such a Constitutional Convention, for either framing or ratification, is one of America’s greatest contributions, if not her greatest contribution, to the mechanics of government–of self-government through constitutionally limited government, comparable in importance to America’s greatest contribution to the science of government: the formation and adoption by the sovereign people of a written Constitution as the basis for self-government. One of the earliest, if not the first, specific discussions of this new American development (a Constitutional Convention) in the historical records is an entry in June 1775 in John Adams’ “Autobiography” commenting on the framing by a convention and ratification by the people as follows:
“By conventions of representatives, freely, fairly, and proportionately chosen . . . the convention may send out their project of a constitution, to the people in their several towns, counties, or districts, and the people may make the acceptance of it their own act.”
Yet the first proposal in 1778 of a Constitution for Massachusetts was rejected for the reason, in part, as stated in the “Essex Result” (the result, or report, of the Convention of towns of Essex County), that it had been framed and proposed not by a specially chosen convention but by members of the legislature who were involved in general legislative duties, including those pertaining to the conduct of the war.
The first genuine and soundly founded Republic in all history was the one created by the first genuine Constitution, which was adopted by the people of Massachusetts in 1780 after being framed for their consideration by a specially chosen Constitutional Convention. (As previously noted, the so-called “Constitutions” adopted by some States in 1776 were mere Acts of Legislatures, not genuine Constitutions.) That Constitutional Convention of Massachusetts was the first successful one ever held in the world; although New Hampshire had earlier held one unsuccessfully – it took several years and several successive conventions to produce the New Hampshire Constitution of 1784. Next, in 1787-1788, the United States Constitution was framed by the Federal Convention for the people’s consideration and then ratified by the people of the several States through a Ratifying Convention in each State specially chosen by them for this sole purpose. Thereafter the other States gradually followed in general the Massachusetts pattern of Constitution-making in adoption of genuine Constitutions; but there was a delay of a number of years in this regard as to some of them, several decades as to a few.
This system of Constitution-making, for the purpose of establishing constitutionally limited government, is designed to put into practice the principle of the Declaration of Independence: that the people form their governments and grant to them only “just powers,” limited powers, in order primarily to secure (to make and keep secure) their God-given, unalienable rights. The American philosophy and system of government thus bar equally the “snob-rule” of a governing Elite and the “mob-rule” of an Omnipotent Majority. This is designed, above all else, to preclude the existence in America of any governmental power capable of being misused so as to violate The Individual’s rights–to endanger the people’s liberties.
With regard to the republican form of government (that of a republic), Madison made an observation in The Federalist (no. 55) which merits quoting here–as follows:
“As there is a degree of depravity in mankind which requires a certain degree of circumspection and distrust: So there are other qualities in human nature, which justify a certain portion of esteem and confidence. Republican government (that of a Republic) presupposes the existence of these qualities in a higher degree than any other form. Were the pictures which have been drawn by the political jealousy of some among us, faithful likenesses of the human character, the inference would be that there is not sufficient virtue among men for self government; and that nothing less than the chains of despotism can restrain them from destroying and devouring one another.” (Emphasis added.)
It is noteworthy here that the above discussion, though brief, is sufficient to indicate the reasons why the label “Republic” has been misapplied in other countries to other and different forms of government throughout history. It has been greatly misunderstood and widely misused–for example as long ago as the time of Plato, when he wrote his celebrated volume, The Republic; in which he did not discuss anything governmental even remotely resembling–having essential characteristics of–a genuine Republic. Frequent reference is to be found, in the writings of the period of the framing of the Constitution for instance, to “the ancient republics,” but in any such connection the term was used loosely–by way of contrast to a monarchy or to a Direct Democracy–often using the term in the sense merely of a system of Rule-by-Law featuring Representative government; as indicated, for example, by John Adams in his “Thoughts on Government” and by Madison in The Federalist numbers 10 and 39. But this is an incomplete definition because it can include a Representative Democracy, lacking a written Constitution limiting The Majority.
From The American Ideal of 1776: The Twelve Basic American Principles.
at Yahoo! Answers: Question in regards to the Federal Reserve?
The Federal Reserve was established in 1913 and is, therefore, a creature of Congress. The President of the United States nominates members of the Board of Governors of the Federal Reserve, subject to confirmation by the Senate. However, the Federal Reserve is basically free to pursue monetary policy independent of Congress or the President. Should the Federal Reserve remain independent of the President and Congress or should the President and Congress control monetary policy? Why?
I wrote this answer, but by the time I’d finished the Q had been withdrawn. No problem, I’d rather have it here on morality101 anyway.
Our problems with the Federal Reserve stem from, perhaps from it’s very existence, but certainly from it’s freedom to manipulate the money supply at will.
Over the last couple of years prior, in an effort to slow down inflation, the Fed caused interest rates to rise. Among other effects, those naive souls who had taken Adjustable Rate Mortgages found their payments rising beyond their means, which caused foreclosures to increase perhaps six-fold, which resulted in mortgage bankers losing liquidity (e.g. Bear-Sterns, there will be more), which resulted in too many homes on the market, which resulted in falling home prices and the virtual shutdown of the construction industry. All these were factors in resulting in yet another recession.
So during 2008, the Fed switched gears and lowered the discount rate several times, which bailed out illiquid mortgage bankers, which increased available mortgage money, which is enabling home buyers to purchase homes (foreclosed or otherwise) at better prices with lower loan rates again.
The whole game is predictable. One needs understand only the very basics of economics (supply and demand applies) in order to predict the future maneuvers of the Fed. I
In due course, the Fed will cycle us back to even greater inflation. Inflation WILL be greater because of the rapidly increasing national debt, caused by the politicians voting for war, socialist schemes, subsidies, “stimulus” etc etc ad nauseum. All are passed by our politicians despite not having the money to pay for them. Thus the congress routinely raises the national debt limit so they can borrow the funds, the Fed makes the bookkeeping entries creating more “money” (federal reserve NOTES), and like magic, it’s all a done deal. Reason enough not to give politicians control of monetary policy, right?
Nothing in all this should be construed as my justifying the continuing existence of the Fed. If, for the time being at least, the Fed continues, then congress must cause the Fed to cease manipulation of the money supply and forbid expansion of the money supply in beyond indexes of population, income, GDP and/or such other indexes as may are appropriate. Perhaps we will rediscover that applied economics actually has some value in our world for this indexing chore. Natural market forces will provide the monetary stability which has been absent from the beginning of the Fed.
There are many proponents for going back to the gold standard, but I’m not convinced that is necessary. You may want to check out as a free-market alternative to the dollar – the Valun.
A rather big issue amongst the politicos today is the Farm Subsidy bill. A part of that fiasco is paying farmers NOT to grow crops. Congress has been fighting, not about the principles involved, but rather about how to apportion the dollars amongst the farmers, while it would better vote this as amongst the many big budget items which should be terminated. You pay the taxes to subsidize the farmers, and are rewarded with higher prices at the grocery.
Happily the farmers are doing very well these days. Again high demand while limiting supply drives farm prices up. Farmers are producing corn for mandated ethanol while our world has a critical food shortage and while government buys ‘surplus’ food to give to the welfare set…
Why?
We should be writing a ditto post on the whole huge spectrum of theft by taxation items. It’s billions and billions. Give us back our lives.
So you think gas prices are high; food prices are too high; farmers are ripping you off; oil companies are ripping you off, and CEO’s are paid too much? Folks, it is really not about any of that; we’re not even gonna go there today. Our Dollar is rapidly losing it’s value = losing it’s purchasing power.
Between the Federal Reserve manipulating our dollar, and the politicians spending dollars we don’t have, your national debt has mushroomed to 9 Trillion, 392 Billion Dollars. That’s up from when it was ‘only’ 6 Trillion Dollars in March of 2002. Today each person in the USA owes about $30,700, so a family of four owes $122,800. Hey, we all get overloaded with numbers. This is only to help you see that the debt is far beyond our ability to pay it. Our USA is bankrupt, and will soon have to admit that.
Using the government’s calculator for CPI (consumer price index, flawed, but..) tells us that what we could buy for $1,000 in 2003 now costs us $1,194 in 2008. I said flawed… you can’t help but know $194 doesn’t come close to paying the increases in keeping your gas tank and pantry filled. If yours are filled, you’re probably ahead of the average Joe! You can play with these numbers yourself at bls.gov.
Okay, so we stumble along like this for 5 years with (admitted) inflation of about 5% per annum. Are your investments (if you even have any!) in banks and stocks, paying you 5%? And uh oh! Government TAXES your investment profits – so you need 7-10% return to actually have 5% spendable. So you take your spendable to the store of the gas station, and guess what? Prices are up WAY more than that 5% you’ve been told, so your spendable buys less. You’re paddling the boat like crazy just to keep even! How is this making your life better?
We buy lots of stuff from China; it’s cheaper and helps make our survival easier. It feels good somehow to help all those Chinese peasants have more than just one measly bowl of rice per day. Many today can own an automobile. The car needs gas, and there are more cars everywhere, which increases the demand for gas, right? China is holding lots of our inflating dollars, which it gets rid of by buying OIL (=gas)! Rational, right? More demand, inelastic supply, so we are paying more for gas. Or haven’t you noticed?
So China passes our dollar to somewhere in the middle east to pay for a few boatloads of oil. Ya know what? OPEC members have noticed that this dollar keeps getting worth less and less. So what happens? Dollar Down, Oil Up! OPEC meets again in September, which follows dead-serious talk at their last meeting about dumping the dollar for some other currency. Why? Lack of confidence in the dollar — it’s no longer stable! You might be wise to consider your personal circumstances if/when that happens. Can we control it? NO!
So our dollar, fiat money which is only an IOU (a promise to pay redeemable with ditto fiat dollars) is becoming worthless (worth less, okay?) That is called inflation. As inflation increases more quickly, we call that hyperinflation. When we have hyperinflation, sorry, “that’s all, folks”.
