Tea Party Speech - Inflation
Jim Forsythe spoke at the Concord Tea Party on 15 Apr, 2009 about inflation. The text of the speech is included below.
Today in America, we are taxed at every turn and by every level of government: Income Tax. Sales Tax. Capital Gains Tax, State and Local Taxes, and in the end, a Death Tax that wrings those last few dollars out of each of us.
We are here today because we all agree that enough is enough. We are here today because we are fed up with the bailouts, the welfare programs, and the never ending list of bureaucratic boondoggles that our hard-earned dollars fund, day after day, month after month, year after year.
But in our righteous anger, we must not forget that there is another tax, hidden from view and all the more devastating for that fact.
Inflation
After years of disuse, this word is once again being heard on radio shows and television programs, and for good reason. Inflation has eaten away at our dollar, devalued our bank accounts and driven up the cost of everything we buy.
Inflation, properly defined, is the increase in the supply of money, which decrease the value of each dollar. Purchasing power can be directly taken from us without taxation simply by increasing the number of dollars in circulation. Since the Federal Reserve system was created in 1913, the price level has increased 2000%. A product that cost 100 dollars in 1914 would cost over 2,000 dollars today.
The story we are often told is that inflation is irrelevant because wages go up along with prices. But anyone who lived through the 70s knows this is a lie. The newly printed dollars are spent by the people who get them first at their full value (generally government workers whose salaries magically seem to outpace inflation). As they enter circulation the prices rise before wages do, which is commonly know as the wage-price spiral. Our wages don’t keep up. This is especially true for elderly living on a fixed income.
Another incredibly damaging aspect of inflation is that it leads to the boom-bust cycle. During periods of heavy inflation we are given a false sense of prosperity causing businesses to overinvest and people to over spend. Eventually, the excessive spending results in a bust. The inflationary policies of the Fed caused the roaring 20s, which then resulting in the stock market crash and the beginnings of the Great Depression. The low interest rate easy money policies of the Fed under Greenspan lead to the housing and credit bubble, and we are now seeing that burst, with devastating effects.
And finally, inflationary policies greatly discourage savings, and encourage spending. As of last year, due to inflationary policies, we were in the bizarre situation that if you bought short term treasury bills you were in essence paying the government to hold onto your money since price inflation was above the interest rate! These policies have lead the United States to become the largest debtor nation in the history of the world, and again, we are currently paying the price.
There is no mystery as to the cause of inflation--it’s quite simple: When the Federal Government wants to spend money—say to bail out an insolvent financial institution like AIG-- it has two options: printing money or raising taxes. There are limits on how high taxes can be raised, however, because most of us pay attention to the amount of money that is being taken out of our paychecks each week. Eventually people start hiding their income to avoid taxes.
But there are no such checks on the printing of money, because it happens behind closed doors. The institution that controls our money supply, the Federal Reserve, is not even a branch of the government--while they enjoy a monopoly on the creation of money, they are not servants of We the People. This power to print money is such a powerful tool that the wealthy banker Mayer Rothschild is reputed to have said: “Permit me to issue and control the money of the nation and I care not who makes its laws.”
This has gone on long enough. We need to hold both the government and the Federal Reserve accountable. Although there are a lot of things that need to be done, the important thing is to take the very first step, which is a full audit of the Federal Reserve. Currently the Federal Reserve is taking trillions of dollars onto its balance sheet without any appropriations through Congress. There is a bill currently in Congress that would audit the Federal Reserve, and has strong bipartisan support - HR 1207. Please call your Congressmen and Senators today and urge them to support HR 1207.
On this great day celebrating our founding fathers rebellion against heavy taxation by throwing tea in the harbor, it’s important to understand that several years later, they realized the heavy price of inflation. George Washington himself said: “The depreciation of it is got to so alarming a point that a wagon-load of money will scarcely purchase a wagon-load of provisions.” Soon the dollar might not be worth a Continental. Let’s save ourselves before we repeat the same mistake that has been made over and over again throughout history. Take the first step in ending the inflation tax – support HR 1207 and throw some tea in the harbor.