George Ford Smith's article critiques the role of the Federal Reserve (the Fed) in enabling the U. S. government to fund various initiatives through fiat money. It highlights how this reliance on printed currency allows for government actions that may be seen as tyrannical, gradually undermining economic stability and citizen wealth.
1. Role of the Federal Reserve: The Federal Reserve provides the government with a continuous supply of money that funds spending without producing any goods. This ability leads to significant government deficits and increasing national debt.
2. Taxation and Spending: The government collected $5.4 trillion in taxes for 2025 while spending $7 trillion, leading to a deficit of $1.7 trillion. This raises questions about the sustainability of government operations and whether such a system should exist.
3. Historical Context: The article references Woodrow Wilson, who established the income tax and the central bank in 1913, allowing for democratic governance through mechanisms of wealth extraction from citizens.
4. Inflation and Its Effects: Inflation is portrayed as a hidden tax that erodes the value of money, benefiting government spending but harming savings and fixed-income earners. The Fed’s goal is to maintain a 2% inflation rate, implying a systematic depreciation of the dollar's purchasing power.
5. Misunderstanding of the Federal Reserve: Many Americans view the Fed as a necessary entity for managing the economy, failing to recognize its underlying mechanisms and the potential for economic manipulation.
6. Federal Reserve Policies: The Fed can influence the economy by adjusting the Federal Funds Rate, which affects interest rates for loans and savings. By manipulating this rate, the Fed aims to manage inflation rates and consumer spending patterns.
7. Changing Definitions: The term 'inflation' has shifted from being seen as a monetary condition to a description of rising prices, complicating public understanding and scrutiny of the Fed's operations.
8. Impact on Economy and Society: The Fed's actions penalize savers and can distort economic growth by incentivizing spending over saving, ultimately harming productivity and living standards.
The article asserts that since the U. S. shifted to a fiat currency system in 1971, the Fed has enabled continuous government funding at the expense of currency value and individual wealth. This system supports government initiatives and military expenditures but poses risks for economic integrity and citizen welfare. The reliance on fiat money is termed a politician’s "best friend," creating an "invisible tax" on citizens that is unlikely to be abandoned, given government interests in continual funding.
The content encourages readers to remain critical of the Fed and understand the broader implications of its policies on inflation and the economy.
No comments:
Post a Comment