They’re Ignoring Inflation: the Greatest Tax of All
(The New American) -- by John F. McManus --
...Democrats are furious with President Obama’s willingness to extend a tax cut for millionaires and to retain low estate taxes for the wealthy. Republicans argue that raising taxes during a recession is counterproductive. The President seems willing to compromise as he gets an extension of unemployment benefits for millions. Some of his opponents worry about deficits. All sides dealing with this controversy have brought their best arguments to the table. But the worst tax of all hasn’t mentioned by any of those who making decisions about how much the government will extract from all Americans.
On the other hand, while all of this back-and-forth is proceeding, the Federal Reserve has announced its intention to create $600 billion out of thin air. The Fed will use this new money to purchase Treasury bonds that foreign lenders no longer consider a good investment. Because the U.S. is having difficulty selling its bonds overseas, it will force the American people to pay for them — not openly but through the age-old process known as inflation.
The $600 billion being brought into existence by the Fed will derive its value by lessening the value of all existing dollars. There is no other way to explain the process except to understand that all dollars will become less valuable. The clever process of seizing a portion of the holdings of the people is a tax. If the money in your savings account, your wallet, your pension, etc. is made less valuable through being secretly confiscated by government (in partnership with the Fed), you are being taxed. You have been victimized by inflation, an increase in the quantity of currency. Wealth has been taken from you by government. Isn’t this what all taxes accomplish?
You will pay for this treachery with higher prices for gasoline, food staples, and other commodities. The higher prices are recognition that dollars are less valuable, their worth being diminished behind the scenes by the partnership of the government and the Federal Reserve.
In a moment of candor early in his career, British economist John Maynard Keynes explained the system: “By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”
Keynes even cited the opinion of the Soviet Union’s Vladimir Lenin who believed that inflation could destroy a nation. He wrote: “Lenin is said to have declared that the surest way to destroy the Capitalist System was to debauch the currency…. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” If Lenin and Keynes understood this, can it be that Bernanke, Obama, and congressional leaders don’t?
Since 1913 when the Federal Reserve came into existence, the value of the once almighty dollar has shrunk by at least 95 percent. Another $600 billion in freshly made currency will lower its value even more...MORE...LINK
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