<< Back to Issues

Economy

One of the major issues talked about in the mainstream media is the economy. People are taking notice as their mortgage rates increase, their dollar buys less, and their jobs move overseas. Every politician talks about what they're going to do to fix the economy, but very few of them know what the underlying cause is.

The economy can be likened to a complex spiderweb, such that if you tug on any one part of it, the entire thing shifts. Government cannot simply "pull" on one part of the economy without expecting that it will have unintended consequences elsewhere. Such a complex system cannot be managed by a small group of people in Washington DC. It must be left in the hands of the people of this country to manage their own piece. This includes not only deciding how to spend money, but also what to use for money. However, the tax system is setup in such a way as to disincentivize people from making that choice.

If one were to purchase gold for $1,000, and then later sell it for $1,100, the casual observer would see that the owner made a 10% profit. But it's important to look at the cause of this 10% increase. In most cases, the value of the gold did not go up, but rather the value of the dollar went down because of monetary inflation. So the owner didn't actually make a gain, he just has 10% more dollars that are each worth 10% less, leaving him in the same place he was when he started. And even though no real profit was made from this transaction, he will still be taxed on that 10% "gain."

This is true not only in the sale of gold, but of any capital item (like real estate). Because every conversion from real property to dollars comes with a potential tax on that conversion, people have an artificial incentive to store their savings in dollars and use only dollars for purchases. These taxes make it difficult to use items like gold and silver for currency.

When the federal government needs more money, but it can't tax or borrow anymore, it simply creates it out of thin air with the Federal Reserve, leading to inflation. This was done several years ago to save the stock market, which is causing our current housing crisis. And they're attempting this again to save the housing market. Recently, hundreds of billions of dollars were pumped into the economy, which will ultimately lead to inflation. Each time they try to fix a crisis, they cause a worse one several years later, eventually leading to an unfixable problem and an economy that collapses entirely. We're already seeing this as our dollars buy fewer goods on the world market.

The Federal Reserve's policies of inflation have caused the dollar today to be worth only four cents from a century ago, and such devaluation is not a natural phenomenon of the economy. Inflation is an insidious tax that robs ordinary people of their purchasing power without them even knowing about it. These inflationary practices cause the "boom and bust" business cycles we've all become accustomed to, but should not have to endure.

To not only fix the short-term economic issues but also put us on solid ground to deal with future issues, we must do the following:

• Legalize the use of competing currencies by abolishing legal tender laws and capital gains taxes.  Consumers and merchants could choose what to use and accept as money.
• Abolish all public policies that try to "fix" the economy by any method that calls for more government involvement.