MINOT, NORTH DAKOTA — “The United States can pay any debt
it has because we can always print money to do that. So there is zero
probability of default,” said former Federal Reserve Chairman
Alan Greenspan on Sunday, August 7, 2011. This is good to know. The
question is whether Mr. Greenspan is pretending to be a comedian or
took some kind of psychedelic drug prior to this comment?
If money could just be printed, it would be better than having it
grow on trees. As a child, every time I wanted something that did not
fit in the family budget, my parents gently reminded me, “Money
doesn’t grow on trees.”
With trees, one has to provide care and nurturing. With a printing
press, all one has to do is push a button. Mr. Greenspan clearly has
no clue what money is. It is not just a piece of paper. It is what
that paper is supposed to represent. Most people know that Greenspan
was a friend and adherent of Ayn Rand. One of her admonishments was
the evil of fiat currency.
Fiat currently is a currency with nothing to back its value. This
is what the U.S. dollar has become ― nothing except the paper it is
printed on. Long ago, the U.S. went off the gold standard; and in the
early 1970, the nation went off the silver standard. Today, the only
thing backing the value of the U.S. dollar is the federal government’s
ability to loot the wealth and earnings of those who have worked to
create tangible things of worth.
The problem facing the federal government is that fewer and fewer
Americans are creating wealth. In fact, more and more Americans are
choosing to do little or nothing and scheme to live off government
redistribution of other people’s wealth.
The recent game played by Republicans and Democrats over the outrageous
U.S. debt focused attention on the real issue. The issue according
to the Democrats is the need to raise revenue (they fear to say “raise
taxes”) and achieve “balance.” What they mean by “balance” is
giving to Congress more of the earnings of those with money to spend.
In short, those who have wealth must give more to the government to
redistribute as it wishes.
While the Republicans pretend to oppose any “revenue enhancement,” they
have said they are willing to “close loopholes.” What this
means is those who actually earn money by creating wealth must pay
more through the elimination of deductions currently in the tax code.
In other words, their tax bite will increase.
Both Republicans and Democrats are as disconnected to reality as
Greenspan, who believes that money can just be printed and all will
be well. Democrats and Republicans believe there is no limit to what
they can loot from those who earn money and create wealth.
The current unemployment level and decline in gross domestic product
growth are not fiction. They are real and will not improve with the
politicians who currently pass for the nation’s leadership in
Washington, D.C. Nor will these indicators be reversed with the mindless
policy recommendations of economists such as Mr. Greenspan. Both groups
are taking America headlong over a cliff, a cliff sure to provide a
very abrupt and painful landing.
Let’s pretend for a minute that Mr. Greenspan is right. Let’s
pretend that any debt can be paid just by printing money as Greenspan
believes. If this is the case, why doesn’t Congress just pass
a law directing that enough money be printed to pay off our debt and
provide a million dollars a year for everyone? Because everyone ― liberal
and conservative alike ― knows such money would have as much value
as the money in their Monopoly game box.
There is only one way out of the financial dilemma America faces ―
stop this mindless spending binge and get government off the backs
of those who create wealth.
Government does not create wealth, it never has, and it never will.
Government regulations, when proper and mindful, can facilitate the
private sector’s ability to produce wealth and the prosperity
that goes with it. However, today government red tape takes as much
or more out of the economy as taxes. This is why unemployment is high
and will remain so, unless and until government stops its relentless
interference with the private sector.
Not only is “too big to fail” a fairy tale; so is Mr.
Greenspan’s belief that debt can be paid off with paper money.
Those who believe in fairy tales should get in touch with the Fairy-Tales-in-Chief
in Washington, D.C., and insist the presses start rolling to print
our way out of debt. They should be sure to send a copy to Mr. Greenspan
and his old colleagues at the Federal Reserve.
Oh, yes ― they should also send a note to China and tell them we
will be shipping full payment just as soon as the ink is dry.
A Voice from Fly-Over
A Voice from Fly-Over Country is copyright © 2011
by Robert L. Hale and the Fitzgerald
All rights reserved.
Robert L. Hale received his J.D. in law from Gonzaga University Law
School in Spokane, Washington. He is founder and director of a non-profit
public interest law firm. For more than three decades he has been involved
in drafting proposed laws and counseling elected officials in ways
to remove burdensome and unnecessary rules and regulations.
See a complete biographical sketch.
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