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More detailed answer: Economics 101 teaches us that prices go up when too many units of currency are circulating in an economy. Truth Radio knows this simple answer is not the whole story. However, what is important to this answer is that since 1913's Federal Reserve movement matured in the mid-1970's there has been no need for our Central Bank to have anything valuable in its vaults. The Open Market game played between the Fed, the US Treasury and private bond dealers is a method of creating money by making bookkeeping entries. There is no limit to the amount of money that can be printed, or sent out in good-but-bad-but-acceptable government checks. Lots of currency can be created can come into being with just a wave of the whim-wand of Congress. That was not true when money creation was limited by the need to have gold and silver in the vault to back it up. So, what happens? Lots of money circulates. That creates a problem. The designers of the Federal Reserve knew that when they created the Fed in 1913. That's why during that same 1913 session of Congress they formalized the present version of the Federal Income Tax. Congress holds the slit-open pillow of money feathers out the window and shakes it over our society. The Internal Revenue Service is the street sweeper, going around our society vacuuming up all the hard-earned money it can. This way, so the monetarists believe, the free-money Fed system can have its free-money and still prevent raging inflation. So, what happens to the income tax you pay? It does NOT pay for the operation of government. It is destroyed in the fond hope of taming (just a little bit) of raging inflation. -- Richard Palmquist Send email to frontoffice@truthradio.com with questions or comments about this subject. |
