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A Journal for Western Man |
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Unfortunately
no one in Washington, especially those who defend
the poor and the middle class, cares about this
subject. Instead, all we hear is that tax cuts for
the rich are the source of every economic ill in the
country. Anyone truly concerned about the middle
class suffering from falling real wages,
under-employment, a rising cost of living, and a
decreasing standard of living should pay a lot more
attention to monetary policy. Federal spending,
deficits, and Federal Reserve mischief hurt the poor
while transferring wealth to the already rich. This
is the real problem, and raising taxes on those who
produce wealth will only make conditions worse. The third option is for the Federal Reserve to create credit to pay the bills Congress runs up. Nobody objects, and most Members hope that deficits don’t really matter if the Fed accommodates Congress by creating more money. Besides, interest payments to the Fed are lower than they would be if funds were borrowed from the public, and payments can be delayed indefinitely merely by creating more credit out of thin air to buy U.S. treasuries. No need to soak the rich. A good deal, it seems, for everyone. But is it? The “tax” is paid when prices rise as the result of a depreciating dollar. Savers and those living on fixed or low incomes are hardest hit as the cost of living rises. Low and middle incomes families suffer the most as they struggle to make ends meet while wealth is literally transferred from the middle class to the wealthy. Government officials stick to their claim that no significant inflation exists, even as certain necessary costs are skyrocketing and incomes are stagnating. The
transfer of wealth comes as savers and fixed income
families lose purchasing power, large banks benefit,
and corporations receive plush contracts from the
government-- as is the case with military
contractors. These companies use the newly printed
money before it circulates, while the middle class
is forced to accept it at face value later on. This
becomes a huge hidden tax on the middle class, many
of whom never object to government spending in hopes
that the political promises will be fulfilled and
they will receive some of the goodies. But
surprise-- it doesn’t happen. The result instead is
higher prices for prescription drugs, energy, and
other necessities. The freebies never come. This article originally appeared on Ron Paul's Congressional Home Page. It is reprinted with his permission. Congressman Ron Paul of Texas enjoys a national reputation as the premier advocate for liberty in politics today. Dr. Paul is the leading spokesman in Washington for limited constitutional government, low taxes, free markets, and a return to sound monetary policies based on commodity-backed currency. He is known among both his colleagues in Congress and his constituents for his consistent voting record in the House of Representatives: Dr. Paul never votes for legislation unless the proposed measure is expressly authorized by the Constitution. To learn more about Congressman Ron Paul visit his Congressional Home Page. This TRA feature has been edited in accordance with TRA’s Statement of Policy. Click here to return to TRA's Issue LXVII Index. Learn about Mr. Stolyarov's novel, Eden against the Colossus, here. Read Mr. Stolyarov's new comprehensive treatise, A Rational Cosmology, explicating such terms as the universe, matter, space, time, sound, light, life, consciousness, and volition, at http://www.geocities.com/rational_argumentator/rc.html.
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