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Inflation and the Fed: Tools of War, Big Government, and Tyranny

Posted on June 9, 2008 by Lance

Lew Rockwell’s speech on the evil, horrible institution known as the Federal Reserve is something that should be printed out, framed, and placed on your wall near the door (in extra large font).

No one pointed out that this institution would permit Americans to fund, without taxes, the destruction of cities abroad and overthrow governments at will. No one said that the central bank would make it possible for the United States to be at large-scale war in one of every four years for a full century. It was never pointed out that this institution would make it possible for the US government to establish a global empire that would make imperial Rome and Britain look benign by comparison.

It is not just war, but everything involved with the growth of government has been made possible only by the Federal Reserve. Lew explains how the system works and why it is necessary to the growth of the government. The state has virtually unlimited funds without having to tax–this is why Republicans disgust me so with their “we must reduce taxes” line. Taxes don’t mean anything to a government with a monopoly on money and a central banking system. They can borrow money (OK with republicans) or inflate (also OK with Republicans). These two are “hidden” taxes on the American public.

I digress. Rockwell goes on, quoting Thomas Paine on the evils of inflation and paper money:

Paper money is like dram-drinking, it relieves for a moment by deceitful sensation, but gradually diminishes the natural heat, and leaves the body worse than it found it. Were not this the case, and could money be made of paper at pleasure, every sovereign in Europe would be as rich as he pleased…. Paper money appears at first sight to be a great saving, or rather that it costs nothing; but it is the dearest money there is. The ease with which it is emitted by an assembly at first serves as a trap to catch people in at last. It operates as an anticipation of the next year’s taxes.

Take some time out of your day to spend 10 or 15 minutes reading this speech, it will do wonders for the mind.

Filed under: Economics, Geopolitics, History, Philosophy, Politics | Tagged: , ,

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2 Responses

  1. Lance, on June 9th, 2008 at 11:06 am Said:

    This speech is simply stunning.

    I say to the sincere Right, if you really want to limit the state, you will have to give up your dreams of remaking the world at the point of a gun. Wars and limited government are impossible. Moreover, you must stop ignoring the role of monetary policy. It is a technical subject, to be sure, but one that we must all look into and understand if we expect to restore something that resembles the American liberty of the founders.

    I say to the sincere Left, if you really want to stop war and stop the spying state, and put an end to the persecution of political dissidents and the Guantánamo camps for foreign peoples, and put a stop to the culture of nationalism and militarism, you must join us in turning attention to the role of monetary policy. The printing presses must be unplugged. It’s true that this will also hit programs that are beloved by the Left, such as socialized health care and federalized education programs. But so long as you expect the state to fund your dreams, you cannot expect that the state will not also fund the dreams of people you hate.

    And let me say a few words to libertarians, who dream of a world with limited government under the rule of law, a world in which free enterprise reigns and where the state has no power to interfere in our lives so long as we behave peacefully. It is completely absurd to believe that this can be achieved without fundamental monetary reform. And yet, until the most recent Ron Paul campaign — and aside from Murray Rothbard and the 26-year-long work of the Mises Institute — I don’t recall that libertarians themselves have cared much about this issue at all.

  2. DaveNate, on June 10th, 2008 at 2:23 pm Said:

    This issue is a real political career killer that is for sure.

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