Lanka Business Online recently posted an article on Ron Paul speaking against the $600-$1200 tax credit to be given to the American tax payer through the economic stimulus package and the Federal Reserve drastically cutting interest rates. Ron Paul is a congressman from Texas and is also on the House Financial Services Committee and the Joint Economic Committee.
Tax Credits
His criticism of the tax credit is that we are creating the money out of nothing. He is quoted below:
"We have consumed everything we have gotten. So, we either have to borrow it from China or we print the money, which is inflationary. So, I'm opposed to that."
In essence, is that the government is borrowing money it doesn't have to "help" the tax payers. Later the tax payers will have to pay taxes to pay off the principle AND interest on the money that was borrowed which will devalue the dollar. What kind of relief is that? Paul is correct and this tax credit is not sound monetary policy.
It is only a temporary solution that makes the tax payers happy because they will see a $600 check in the mail. In the end though, the dollar will be weakened because of the reasons that he stated above. There are fundamental monetary problems that need fixing before the United States can drag itself out of this economic mess. A "shot in the arm" will not be sufficient when the whole arm is decaying.
Interest Rates
On 01/22 the Federal Reserve cut interest rates by 0.75% down to 3.5% from 4.25%. In the January 29-30 meeting, it is expected that the Federal Reserve will cut interest rates again perhaps another 0.50-0.75%. Although many investors and politicians are embracing the Federal Reserve interest rate cuts, Paul says Federal Reserve moves to cut rates would further hurt the US dollar.
"And we can't solve the problems of a weak dollar by printing more dollars."
"So, I think the dollar is still going to remain under attack, because you can't solve the problem of too much credit stimulus by more credit stimulus, because it will just lead to a weaker dollar. And I think they [Fed] are between a rock and a hard place."
Paul is right on the money (pun intended) related to the Federal Reserve manipulating interest rates. He also states that the current economic crisis that we are in is a direct result of the Federal Reserve lowering interest rates to 1.0% which "stimulated" the housing market.
My Thoughts
I am of course going to take the $600 tax credit because if I don't I will be at an economic disadvantage. But unlike most Americans, this is going straight to savings. However, I agree with Ron Paul on all accounts related to economics and monetary policy.
Not much change can be done unless real monetary reform is put through. I believe that monetary reform is the most important political issue today (See related blog and movies below for more information) and Paul stands out as the only candidate willing to make changes, much less address the issue.
Unfortunately the media has completely ignored him because of his upfront stance on monetary policy (see America: Freedom to Fascism) even though he has made a tremendous grassroots campaign. Although he is not 100% ideal on his social issues, he is a candidate that is worth investigating.
Related Blogs:
The IRS, Tax Protesters, and the Federal Reserve
Related Links:
Ron Paul Campaign Website
Videos on YouTube
Ron Paul and Bernanke Part 1
Ron Paul and Bernanke Part 2
Related Links
The Money Masters
The Federal Reserve Bunk
Pay No Income Tax
Liberty Dollar
Recommended Books
The Federal Mafia
Recommended Movies:
All of these movies are free to watch on Google Video.
Money As Debt
The Money Masters
America: Freedom to Fascism
2 comments:
Dude, I'm droppin' my gwap at the Gap!
Kidding
So here's my question: If the stated objective of these rebate checks (to solve the economic crises) is not going to be achieved, why is it being done?
What I would say (this is mostly coming from the 9-11 denier himself Noam Chomsky) is that the stated objective is not the real objective. That gets us down to an even greater question! What is the objective of these rebates!?!
And IMO if I use the your comments, Congressman Paul's comments and the info from the Documentaries that you listed (mostly Money Masters and Money As Debt) then I can come to this answer:
The "powers that be" would like to postpone the economic crises as long as possible so that it will be as bad as possible.
In the great depression, wealth did NOT just disappear. While money may not be a finite good in our system (because it can basically be created out of nothing), I think that we can abstract wealth to be a finite good. The people lost a lot of wealth in 1929 so where did that wealth go? I wish I could know, but i would guess it was given to the ruling elite.
I believe that is the over reaching goal of the "powers that be," to centralize wealth and therefore centralize power.
Let me say that i do not believe that the powers that be are evil people. Power Corrupts, and I think that we need to spread the burdon of power amongst our society as equally as possible...
Yay Socialism...
Rant finished.
Post a Comment