The Fed Steals From The Poor And Gives To The Rich

8 comments

Posted on 18th November 2013 by Administrator in Economy |Politics |Social Issues

, , ,

Submitted by Ron Paul via The Free Foundation blog,

Last Thursday the Senate Banking Committee held hearings on Janet Yellen’s nomination as Federal Reserve Board Chairman. As expected, Ms. Yellen indicated that she would continue the Fed’s “quantitative easing” (QE) polices, despite QE’s failure to improve the economy. Coincidentally, two days before the Yellen hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”

As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!

It would be a mistake to think that QE is the first time the Fed’s policies have benefited the well-to-do at the expense of the average American. The Fed’s polices have always benefited crony capitalists and big spending politicians at the expense of the average American.

By manipulating the money supply and the interest rate, Federal Reserve polices create inflation and thereby erode the value of the currency. Since the Federal Reserve opened its doors one hundred years ago, the dollar has lost over 95 percent of its purchasing power —that’s right, today you need $23.70 to buy what one dollar bought in 1913!

As pointed out by the economists of the Austrian School, the creation of new money does not impact everyone equally. The well-connected benefit from inflation, as they receive the newly-created money first, before general price increases have spread through the economy. It is obvious, then, that middle- and working-class Americans are hardest hit by the rising level of prices.

Congress also benefits from the devaluation of the currency, as it allows them to increase welfare- and warfare-spending without directly taxing the people. Instead, the increase is only felt via the hidden “inflation tax.” I have often said that the inflation tax is one of the worst taxes because it is hidden and because it is regressive. Of course, there is a limit to how long the Fed can facilitate big government spending without causing an economic crisis.

Far from promoting a sound economy for all, the Federal Reserve is the main cause of the boom-and-bust economy, as well as the leading facilitator of big government and crony capitalism. Fortunately, in recent years more Americans have become aware of how the Fed is impacting their lives. These Americans have joined efforts to educate their fellow citizens on the dangers of the Federal Reserve and have joined efforts to bring transparency to the Federal Reserve by passing the Audit the Fed bill.

Auditing the Fed is an excellent first step toward restoring a monetary policy that works for the benefit of the American people, not the special interests. Another important step is to repeal legal tender laws that restrict the ability of the people to use the currency of their choice. This would allow Americans to protect themselves from the effects of the Fed’s polices. Auditing and ending the Fed, and allowing Americans to use the currency of their choice, must be a priority for anyone serious about restoring peace, prosperity, and liberty.

8 Comments
  1. AWD says:

    Thank God for Ron Paul. Below is a perfect example of what he’s talking about, all brought about by the criminals in government and the Federal Reserve:

    Treasury Forced to Issue $1T in New Debt in First 6 Weeks of FY14
    November 18, 2013 By Terence P. Jeffrey

    (CNSNews.com) – Between Oct. 1, 2013, the first day of fiscal 2014, and Nov. 14—which was less than a month after Congress agreed to temporarily suspend the legal limit on the federal debt—the Treasury was forced to issue more than $1 trillion in new debt.

    During that time, according to the Daily Treasury Statement, the Treasury issued $1,014,215,000,000 in new bills, notes, bonds and other securities.

    The government needed this $1,014,215,000,000 to cover government obligations and expenses that exceeded the $255,080,000,000 it raked in through tax revenues during the same six-week period.

    Where did that combined $1,014,215,000,000 in newly borrowed money and $255,080,000,000 in new tax revenues go?

    The lion’s share went to payoff maturing securities the Treasury had sold before and had now come due.

    In total, according to the Daily Treasury Statement, the Treasury needed to redeem $879,734,000,000 in maturing debt during the first six weeks of the fiscal 2014.

    After that, the government’s biggest expenses were $98.853 billion in Social Security benefits, $77.704 billion in Medicare expenses, $35.304 billion to Defense Department vendors, $34.623 billion for Medicaid, $20.537 billion for the salaries for federal workers (who have now been compensated for the time they missed during the partial shutdown), $20.155 billion for the Department of Education, $13.060 billion for the Department of Agriculture’s Food and Nutrition Service (which includes the food stamp program), $11.152 billion in Health and Human Services Department grants, $10.648 billion for Housing and Urban Development Department programs, and $9.172 billion to buy insurance for federal employees over and above the $20.537 billion they were paid in salaries.

    18th November 2013 at 8:59 pm

  2. T4C says:

    Dewey Cheatum Howe (ZH comment)

    Off topic.

    http://www.huffingtonpost.com/2013/11/18/siri-ron-paul-apple_n_4296673.html

    Regardless of your own political persuasion, apparently your iPhone is a libertarian.

    Siri, the voice-activated personal assistant on Apple devices, pulls up the Wikipedia page of everyone’s favorite libertarian, former Rep. Ron Paul of Texas, when asked “Siri, what are your political views?”

    Try it yourself. It not only worked for the YouTube video maker above, but also for dozens of people on Reddit and Facebook, as well as a few Huffington Post editors who tried it out.

    We reached out to Apple for comment and will update if we receive it.

    [Ron Paul Flix via BuzzFeed]

    http://www.zerohedge.com/contributed/2013-11-18/almightier-bitcoin

    18th November 2013 at 9:05 pm

  3. Thinker says:

    Also off topic, but this confirms everything you’ve been saying about government unemployment stats:

    Census ‘Faked’ 2012 Election Jobs Report
    http://nypost.com/2013/11/18/census-faked-2012-election-jobs-report/

    18th November 2013 at 10:20 pm

  4. sensetti says:

    Stop worrying Obama’s going to fix all inequalities before he exits stage left

    Establishment Proposes: “Have the Government Give Every Adult a Basic Income”

    A simple idea for eliminating poverty is garnering greater attention in recent weeks: automatically have the government give every adult a basic income.

    It’s exactly how it sounds. The government would mail every American over the age of 21 a check each month. That’s it. Everyone is free to do what they like with it.

    Giving each working-age American a basic income equal to the poverty line would cost $2.14 trillion. For some comparison, U.S. GDP was almost $16 trillion in 2012 and the defense budget was $700 billion.

    But a minimum income would also allow us to eliminate every government benefit as well. Get rid of SNAP, TANF, housing vouchers, the Earned Income tax credit and many others.

    The clear [benefit] is that no American would live below the poverty line. The U.S. has been waging the War on Poverty for a generation now and still nearly 50 million Americans are below the line. This would end that war with a decisive victory.

    98efe5d82225e2dc7770d0140411fc89.jpg
    http://www.shtfplan.com/headline-news/establishment-proposes-have-the-government-give-every-adult-a-basic-income_11182013

    18th November 2013 at 10:42 pm

  5. sensetti says:

    b37bdb55dd4b5c5f77057ab1845fa840.jpg

    18th November 2013 at 10:47 pm

  6. llpoh says:

    Sensetti – I saw that. It would cost $2 trillion, and elimitae a few hundrem billion in other bennies. So a net cost of around $1.5 trillion. Or ten percent of GDP.

    Hahahahahaha! That’ll work.

    18th November 2013 at 10:51 pm

  7. Obama says:

    It won’t cost anything, I am going to confiscate the wealth of the rich and level the playing field.
    Oh, LLPOH keep workin dude I need your money, all of it.

    18th November 2013 at 11:08 pm

  8. KaD says:

    As an example: WalMart hold a food drive so ITS OWN employees can afford a Thanksgiving.

    http://www.today.com/news/wal-mart-defends-controversial-food-drive-employees-2D11618754

    18th November 2013 at 11:15 pm

Leave a comment

You can add images to your comment by clicking here.