Sunday, February 1, 2009

Is Wild Inflation On The Horizon?

Guest Editorial by Randy Kleine

Inflation, properly defined, is the rapid expansion of the money supply and/or credit. Higher prices at the pump and at the grocery store are not inflation--higher prices are the result of inflation. Inflation is the deliberate government policy of printing more money or extending more credit through its privately-owned agency, the Federal Reserve Bank (affectionately called "The Fed").

The latest example of inflationary policy is the $1 trillion "economic stimulus" bill passed by the House of Representatives on January 28. Since the government has not yet collected the money to support this spending through taxation, it will ask a compliant Fed to extend it credit. Then politicians will have "money" available to spend on whatever they dream up.

A look at the spending proposals in the "economic stimulus" bill quickly reveals a cornucopia of "pork-barrel" social-engineering projects and an increase in the size and power of government that would make any dictator's (or king's) heart go a-twitter. Dictator, you say?

A key principle of a republican form of government is the "consent of the governed," that is, the people are consulted when decisions affecting them are being made by that government. Dictators, on the other hand, need consult no one (although most dictators will surround themselves with a group of yes-men). The term "dictator" arose in ancient Rome to connote a magistrate with supreme power, appointed in times of emergency.

The numerous Bush "bail-outs" in 2008 and the Obama "economic stimulus" of 2009 are predicated on the allegation that the United States is in an economic emergency. The question is: do these guys think like dictators?

Hear President Bush's Secretary of the Treasury Hank Paulson as he used fear to force Congress into granting him unprecedented powers for a $700 billion bail-out of Wall Street. Language from his three-page proposal is telling: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

That the government must go to the people (through their representatives) to request taxes to finance government projects (for example, a school levy or bond issue) is vital to liberty because the peoples' consent must be obtained. When a government can print and spend money at whim (through inflation by the Fed), the peoples' consent is no longer required.

What we have is the arrogance of several hundred people in the Federal government who think that they are more capable than 300 million Americans in making sound economic decisions. The politicians are running the economy instead the people. How is that different from Fascist Italy, Nazi Germany, Soviet Russia, or Communist China?

Dear reader: even if you don't care about your liberty, do you care about your bank account or dollar-denominated investments?

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