Ron Paul: Inflation is Theft!

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01/31/2011

America Is Hurting While the Fed's Cronies Enjoy Full Employment and Jackpot Bonuses

by Ron Paul

Unemployment continues to plague our economy. In spite of constant claims that we have just turned the corner into recovery, the jobs report remains grim with no real signs of improvement. While Keynesian economists and big government apologists scratch their heads about persistent unemployment in spite of unprecedented government so-called "investment" in the economy, free-market economists understand the problem perfectly well. In short, they understand that we are looking to the Federal Reserve to solve an unemployment crisis that the Fed itself largely created.

For example, the Fed is supposed to maintain full employment as half of its dual mandate. But the Fed simply has the wrong tools to do this. In fact, its credit expansion and manipulation of interest rates cause harm when they are applied to "help the economy." As we saw with the housing boom and bust, Fed-created inflation cannot be sustained without harmful consequences. The Fed's artificial boom led to the unemployment we're suffering today.

The Fed is not a small business or a manufacturer that creates value or increases productivity to sustain real job growth. It literally destroys value by printing more money and distributing it through sweetheart deals to well-connected banks and corporations, including foreign banks. The only success the Fed has had in maintaining full employment has been on Wall Street, where it props up crony banks and investment houses to protect them from going bankrupt as they should. Instead they survive to malinvest another day while their executives enjoy jackpot bonuses.

The Fed also pumped up employment in the housing industry with artificially low interest rates that created an unsustainable demand for housing. Millions jumped into the sector when the money was loose and the bubble inflated. Besides the many who bought houses they could not afford and now face foreclosure, there were also those who became employed in housing-related fields. These people invested time and money in training and spent years establishing careers in real estate, mortgage lending, construction and contracting. Careers that all vanished into thin air with the burst of the bubble. Now they face considerable disruption in their lives as they struggle with unemployment, underemployment, and decisions about retraining for different careers. This amounts to a tremendous amount of unnecessary waste that would not have occurred had the housing industry be allowed to develop naturally according to market demands.

Jobs are properly created by entrepreneurs who are willing to work hard and take calculated risks. Jobs are also created through real increases in productivity, resulting from real investment profits or conservative borrowing at market interest rates. But the Fed has made those risks impossible to calculate and made borrowing money artificially cheap. As a result, economic growth has been chilled while unemployment skyrockets.

Until those in power understand the harm they do with central economic planning, we will continue to slide backwards and lose jobs. The Fed needs to stay out of the job-creating business altogether, and the federal government needs to focus on its constitutional duties. Just when we need government to back off, we hear about more government intervention in the economy in the form of "more spending," only they call it "investment." It is more properly called "malinvestment," and the resources that are funnelled into industries by government policies will only hurt employment more in the long run.

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Ron Paul is America's leading voice for limited, constitutional government, low taxes, free markets, a return to sound monetary policies, and a sensible foreign policy that puts America first.

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Category:

News & Politics

Tags:

• ron paul
• inflation
• bailouts
• federal reserve
• stimulus
• full employment
• wall street
• cronies
• corruption
• theft
• finance
• money
• fiat money
• congress
• news
• politics

[remotespeed24]

Yes, Inflation is stealing from the people... Stop them Ron Paul...

[slapcompany]

Success for Managers means: I want to be in healthy relationships. I want a real connection with people I spend so much time with.

[flagator0012]

Anyone who thinks that a lack of regulation caused the housing crisis is either being ignorant or fooled by our congress. What made all those bankers give out bad loans? Have any of you pro regulation looms thought of that? Banks don't make that kind of error all at once... Unless their incentives are perversed by a government. You simply cannot tell banks that Fannie and Freddie must buy their bad loans and expect the banks to continue to deny bad loans... It's just a beautiful cycle for power

[MadebyUSdotcom]

Ron Paul is right.

Ron Paul 2012

Have the courage to support him - speak your mind.

[mzedong001]

If Ron Paul was really not a government apologist, he´d be pro - revolution.

[Syphalis1]

@deficithawker So you are defending that practice? Why should government subsidize insurance at all? Especially when private companies are making the profits off that, meanwhile being encouraged to take tons of risk because they know they'll be bailed out if shit hits the fan?

[Syphalis1]

@zombiefitnezz My Girlfriend's mother works for BC/BS here in Detroit and I often ask her about it, but no, I have never worked for an Insurance company.

But how much does Government regulate Auto Insurance (other than mandating it)... or house, or renters insurance for that matter? The regulation seems to be fairly limited, and I am able to "Shop Around" to see which offers the best coverage for the best deal.

I am also currently shopping for health insurance and learning more.

[Syphalis1]

@rpierre777 When will it be over (Obama said he would end the wars, instead he escalates and some how calls having 60,000 troops in Iraq the end of the war)? Why are we fighting it? What does victory even look like? Why have we been in a state of perpetual war since WWII? Ever read 1984? It's all BS and control... and the american people/media don't even care! Nor do they ever make the connection between are economic peril and the multiple "wars" we are always fighting

[Syphalis1]

@rpierre777 but you have no experience in dealing with the regulations. Sure, they look great on paper! Keep us safe, protect us! But implementation is a pain! I wanted to open my restaurant in Down Town Royal Oak, but it would have taken me over a year to become compliant with every regulation! But who can open it quickly? Those with political connections and deep pockets!

And being clean is such a small part of health inspection. You should see what I get knit-picked over!

[Syphalis1]

@rpierre777 Because as with Seatbelt and Speed limit laws, the Feds do not have the power to make them, but they can hold funding ransom to the states unless they do pass the laws. So it's BS.

And again, I'm not making shit up. Google it, their are studies that show fatality rates rise. But politicians don't really care about facts/studies.. another big reason to support them having less power.

[Syphalis1]

@rpierre777 When I went through Food Safety in college, at absolutely no point did "LAWS" come in to play. It was about whats the best/safest/smartest practice. Laws are too slow. And they are made without examining the consequences.

Restaurants are only inspected twice a year. That does not make sure everyone always washes their hands.

And go watch Ramsays Kitchen Nightmares, and see how "Clean" some of your "A" rated restaurants are.