OpinionTrending Commentary

Free Markets the Only Solution to Inflation

Ron Paul, a former Congressman from Texas and Republican presidential candidate, said in a May 17 op-ed that ending the welfare and entitlement state and cutting government spending could save Americans from the massive inflation heading our way but fears there is no political will to do just that.

Last month’s reporting that the Consumer Price Index (CPI) had jumped 4.2 percent from the previous year which led to inflation, an issue normally ignored, to become a topic of conversation in the media. The 4.2 percent figure is what was reported, but the government and Federal Reserve have historically rigged the data.

Financial writer Charles Hugh Smith has noted that the CPI “has been gamed for decades to understate inflation,” and he said what cost $1.65 in 1970 now costs $18.

“The Fed has created trillions out of thin air to boost the speculative wealth of Wall Street, but it can’t print experienced workers willing to work for low wages,” Smith wrote.

Paul noted that Fed Chairman Jerome Powell, who has claimed inflation will only be “transitory,” has issued a litany of excuses for the inflation while ignoring that the Federal Reserve’s own policies are the underlying cause to the problem.

The Fed’s decades-long policy of near-zero interest rates along with massive money printing along with the government’s bipartisan out-of-control spending is the disease, according to Paul.

“The refusal of Congress to cut spending means the Fed will keep increasing its balance sheet in an effort to monetize skyrocketing debt,” Paul wrote. “Eventually, the increasing debt and inflation will lead to a major economic meltdown. The meltdown will likely include a rejection of the dollar’s world reserve currency status.”

The U.S. national debt is currently $28.3 trillion, headed to $50.1 trillion by 2025, according to usdebtclock.org, but that’s excluding unfunded liabilities. Adding those unfunded liabilities, like Social Security and Medicare, the current debt is $132.4 trillion, according to Truth in Accounting.

Paul wrote that a return to the free market is the answer.

“Congress could transition away from entitlement and welfare programs without harming current or soon-to-be beneficiaries by cutting spending on militarism and corporate welfare,” Paul wrote. “Part of the savings from these cuts could be used to pay down the debt, and part could be used to provide payments for current and soon-to-be beneficiaries of government programs while we transition to a free market.”

However, that will require politicians who want to do the right thing, something that is sorely lacking on both sides of the aisle in Washington, D.C.

“Unfortunately, there is not much appetite in Congress for spending cuts,” Paul wrote. “The main Democratic criticisms of President (Joe) Biden’s 1.52 trillion dollars budget, which increases spending by 8.4 percent, are that Biden is not proposing bigger increases in spending and debt, or in taxes on ‘the rich.’ Biden’s budget increases are in addition to the trillions in other spending Biden is pursuing, including related to Covid, infrastructure, and his ‘American Families Plan.’”

Paul added: “Republicans are making obligatory attacks on Biden’s spending, while also attacking Biden for increasing military spending to ‘only’ 753 billion dollars. Republican complaints about Biden’s big spending ring hollow given their support for Presidents Donald Trump and George W. Bush’s spending increases and Republicans’ proposals to spend billions on infrastructure.”

The people could force politicians to cut spending, but that would mean actually desiring liberty and personal responsibilities. Will they?

“The only way to avoid the crash is to spread the truth among enough people to force Congress to reverse course,” Paul concluded. “Early steps in reversing course are blocking Biden’s big spending plans and passing Audit the Fed so the American people can finally know the truth about the Federal Reserve’s actions.”

Content syndicated from TheLibertyLoft.com with permission.

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