End the Fed.
|Article Type:||Critical essay|
Legislators (Criticism and interpretation)
Free enterprise (Analysis)
Inflation (Finance) (United States)
Inflation (Finance) (Analysis)
|Author:||Arnett, Jerome C. Jr.|
|Publication:||Name: Journal of American Physicians and Surgeons Publisher: Association of American Physicians and Surgeons, Inc. Audience: Academic Format: Magazine/Journal Subject: Health care industry Copyright: COPYRIGHT 2009 Association of American Physicians and Surgeons, Inc. ISSN: 1543-4826|
|Issue:||Date: Winter, 2009 Source Volume: 14 Source Issue: 4|
|Topic:||NamedWork: End the Fed (Nonfiction work)|
|Organization:||Government Agency: United States. Federal Reserve Board|
|Persons:||Named Person: Paul, Ron; Paul, Ron|
|Geographic:||Geographic Scope: United States Geographic Code: 1USA United States|
End the Fed, by Ron Paul, hardback, 212 pp, $21.99, ISBN
978-0-446-45919-6, New York, N.Y, Grand Central Publishing, 2009.
"The only unique power of the Fed is to create money out of nothing. " "[The] central bank is the biggest generator of underground criminal activity ever. " "Bad economic policy can destroy a civilization. "
A physician and former USAF flight surgeon, 11-term Rep. Ron Paul (R-14-Texas) is a distinguished counselor to the Ludwig von Mises Institute and an authority onAustrian economics, with its emphasis on sound money and small government. He is author or co-author of at least six earlier books dealing with economics.
According to Dr. Paul, civilizations literally rise and fall on the basis of the quality of their money. All citizens should have an intense interest in what money is and how our central bank, the Federal Reserve Bank (the Fed) takes wealth from the poor and middle classes and transfers it to the wealthy. Dr. Paul says that the Fed's inflation is responsible for our boom-bust cycles, price inflation, recessions, depressions, and our excessive debt.
Dr. Paul believes that the Fed's debasing of our currency constitutes counterfeiting, and that it robs the poor. As he says, "It's cheating. It's a tax. ... It benefits the few at the expense of the many." He believes the Fed should be abolished because it is immoral, it is unconstitutional, it undermines liberty, and its inflation undermines the morals and property rights that are the foundation of our free-market economy.
Dr. Paul explains that the Fed is not a government agency but a coalition of government and big bankers, and it provides the largest banks with privatized profits and socialized losses. Since its creation in 1913, it has thrived on secrecy and inside deals, which only serve the interests of the elite.
Under a free market and a stable quantity of money (the total amount doesn't matter), increased production of goods will result in a gradual fall in the price level year by year, and therefore an increase in the purchasing power of the dollar. This means a steady increase in the standard of living for each member of society.
The Fed, however, is in the business of generating inflation, Dr. Paul says; the widespread misconception that it fights inflation is simply false. From the country's founding until 1913, the money base was stable with very little inflation, and our standard of living rose to the highest in the world. But during the Fed's 95-year reign, the dollar has dropped in purchasing power to less than 5 percent of its 1913 value. The only response from Congress has been to give the Fed even more power as the principal central economic planner.
Creation of the Fed has been called the most tragic blunder Congress ever committed. It is a form of financial fascism that benefits the privileged rich and powerful over the poor and middle classes. Its inflation is the most vicious and regressive of all of the forms of taxation, Paul writes.
In addition, according to economists Ludwig von Mises and Murray Rothbard, inflation is an indispensable means of militarism, with its accompanying growth of government. For example, only an estimated 21 percent of the cost of World War I was financed through direct taxation; 56 percent was financed through Fed-backed borrowing, and 23 percent through outright money creation by the Fed. Its monetary inflation has allowed the U.S. government to pursue one war after another, and to set up a huge welfare state that covers all classes in society. It is no coincidence that the century of two world wars and nearly constant lesser wars coincided with the century of central banking.
Dr. Paul tells us that there is little understanding of any economic policy in Washington. Because of this ignorance, legislators have been led to believe that there are no limits on what they can spend. As a result, all the attempts of Congress, presidential administrations, and the Federal Reserve to run the economy have been disasters. They have brought us to our current tragic economic mess: our wealth is drained, our productivity is sharply diminished, our freedoms are eroded, and our empire is fragile. The entire federal government is now one giant toxic asset.
All we have gotten from Congress is more of the same--more spending and more money creation. Since we have been through nearly 100 years of repeating the same cycle, Dr. Paul believes it is time we learn from this experience. He believes that the free market offers the only answer to our dilemma. As he points out, market forces are always working to correct the mistakes made by government, and evidence is abundant that the markets always have been stronger than elites armed with false ideologies.
Dr. Paul insists we must return to the gold standard, with no Fed. In four fascinating chapters he outlines the philosophical, constitutional, economic, and libertarian cases for doing this. He believes this is the single greatest step we can take to restore constitutional government, build prosperity for all Americans, and restore our freedom. While he thinks that more people are coming to understand this, Dr. Paul points out that our problems are the still-widespread ignorance of much of the public, the arrogance of the members of the Fed, and the irresponsibility of Congress.
Congress will only respond when it is impossible not to, Paul writes. So, education of the public in economics is the necessary key to political change. Everyone must understand that self-reliance, free markets, private property, sound money, and enforceable contracts are necessary to ensure prosperity, peace, and happiness.
As von Mises has noted, economics is "the philosophy of human life and action and concerns everybody and everything." It is why he admonished that to learn economics is every citizen's "primary civic duty."
Freedom cannot exist without sound money. If it isn't already too late, ending the Fed will mark the beginning of the rebuilding of our free society. Without this, the prospects for our freedom are dismal, Paul concludes.
Jerome C. Arnett, Jr., M.D.
|Gale Copyright:||Copyright 2009 Gale, Cengage Learning. All rights reserved.|