Many US politicians have been peddling false narratives about the source of inflation, and have assigned blame to greedy corporations, Russia, and other unrelated factors. Our government has willfully kept people ignorant about the Federal Reserve, wasteful government spending, and the true source of inflation. The cost of ignoring the true cause of inflation continues to grow every year, and the US economy may soon be beyond repair.
Henry Ford made this popular quote, which accurately describes the current state of the US economy.
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Sadly, many people do not understand the true evil nature of the Federal Reserve and instead spend time bickering about corporations and politicians while inflation continues to eat away at their purchasing power. In reality, the only way to stop inflation is to audit the Federal Reserve and force politicians to avoid growing deficits.
Rand Paul Shares Wisdom from Milton Friedman
Rand Paul has been one of the strongest proponents of auditing the Federal Reserve and pushing for the government to cease some of its wasteful spending practices, such as foreign aid. He recently shared a Milton Friedman video, which focuses on how governments are the sole source of inflation because they increase the money supply.
Inflation is not the product of corporate greed, and it can’t be fixed by utopian programs created by the government, such as price controls, subsidies, and grants for first-time home buyers. It is obtuse to look to the government for any form of solution, as it is the sole cause of inflation.
Government spending has been out of control, as politicians have chosen to increasingly fund other countries and to run massive federal deficits. Moreover, politicians have also failed to hold the Federal Reserve, a private entity, accountable for its reckless money printing. If these practices continue, then the US middle-class population will continue to pay for it through increased taxation and inflation.
QE Experiment Increased during COVID
Ever since the Great Financial Crisis, many people have probably wondered why economic conditions have become harder for Americans despite the stated economic recovery. In reality, the Federal Reserve embarked on a massive money printing spree, which benefited those who invested heavily in the equity markets or real estate. However, the price of rent, food, and other products has also been growing substantially due to these actions.
One of the main inflation culprits has been the Federal Reserve’s massive expansion of its monetary base, by nearly 7x since 2008. This activity created greater problems in the 2020s when some of this money made it into the hands of more people, resulting in higher inflation due to the velocity of money. We are only beginning to feel the consequences of the disastrous policy decisions that the Federal Reserve made.
Every year that the Federal Reserve continues to engage in this reckless activity, it slowly destroys the integrity of the US dollar and makes life harder for middle-class Americans due to inflation. As a result, many countries have begun dumping US treasuries and stocking up on gold, and there has been a rising wave of de-dollarization globally. The Federal Reserve has harmed middle-class Americans and reduced the United States’ global hegemony, yet it still does not even have to pass an audit to justify its obtuse actions.
Government Spending is Out of Control
Why are we still funding other countries when we can’t get our debt under control?
The United States’ debt has been spiraling out of control, yet our government has displayed no interest in fixing this situation. Our debt is more than 3x higher than it was during the great financial crisis, and our current government has not provided any indication that it has a serious plan to reverse this trend.
However, Rand Paul recently introduced the Six Penny Plan, which is his plan to balance the Federal Budget in the next five years. This is one of the few sane attempts to honestly address our nation’s rising debt.
Rand Paul has been very vocal about some of the government’s wasteful spending habits, including its foreign aid, and is working hard to help the government keep our national debt under control. This rising debt is not only an issue for our economy, but it also presents a strong national security threat, as our current military spending is already a strain on our budget.
Stop Blaming it on Corporate Greed: Price Controls won’t work
We need to go after the big fish. It is obtuse to blame corporations for the problems created by the government and Federal Reserve.
One of the biggest misconceptions about inflation is the belief that it is a product of corporate greed. When Kamala Harris recently discussed her plan to address rising inflation, one of the key issues that she mentioned was corporate greed and price gouging.
“ We will lower your food and grocery bills by going after price gougers who are keeping the cost of everyday goods too high.”
Kamala Harris ignores some of the key issues of price controls, which have historically created many economic issues. In some cases, companies may choose to produce a smaller quantity of a product, which would lead to shortages. The fact that Kamala Harris solely focuses on food price controls should be very concerning, as supply shortages in this industry could be devastating for the American consumer. Another point to consider is that Nixon imposed price controls on gasoline, which also led to shortages and rationing of gas. Grocery stores already have very thin profit margins, so any price controls could threaten these companies’ operations. Moreover, price controls could also disproportionately affect smaller players, which could in turn provide more issues for rural communities.
It is very juvenile to call companies greedy and to criticize them for only caring about making a profit. In reality, every company is 'greedy’ according to this definition. Moreover, many companies have gradually reduced the price of many products, such as electronics, due to the increased supply and competition. A company’s decision to modify its prices is based on factors like demand and competition, and is not an emotional response or moral judgment.
The Fed is the Problem
The Federal Reserve’s balance sheet has ballooned for decades, while people have argued about whether the issue is related to political parties, corporations, or other unrelated factors. Very few politicians are willing to go after the Federal Reserve, and Rand Paul has mainly had to battle against the Fed with support from only a handful of other politicians.
Luckily, Rand Paul has been able to reintroduce the “Audit the Fed” bill, which could help bring some accountability to the Federal Reserve.
This is one of the first steps that Americans need to take to get inflation under control. Until then, any discussions about corporations and other unrelated topics are just populist noise, which will do nothing to reduce inflation.
We so need to get this country turned around.
The federal reserve should be the first to go.