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The annual inflation rate in the U.S. edged up to a 13-year high of 5.4% in September of 2021 from 5.3% in August and above market expectations of 5.3%. What is hard for most consumers to grasp is that inflation is a hidden, insidious tax that affects everything. It affects low-income families who struggle to pay for food and services, and harms the vital middle-class needed for a stable society.
Not only does it eat away at the value of the dollar, it devalues other assets such as real estate. A 5% rate of inflation will lessen the value of a person’s home by 5% regardless of market value, without the owner’s being aware of it.
Biden’s proposed spending bill is in the trillions of dollars. Whether it is partly funded by tax increases or not, it will cause massive inflation over and above the present rate and will bring back painful memories of the inflation that ravaged the country under the administration of peanut-farmer Jimmy Carter (D).
Washington politicians are very skillful at raising taxes through inflation. Politicians love inflation because creating money from nothing makes it easy to finance wars and pork. Whenever money is needed by the federal government for wars or pork, the Federal Reserve will buy securities from the U.S. Treasury by means of a check drawn on itself. The Treasury then uses this new money to finance increased federal spending. The Fed is the only entity that can legally create money from nothing. Created by anyone else, it is called counterfeiting.
Newly created money from nothing floods the economy and makes all assets, whether liquid or not, worth less. If Biden’s spending bill becomes law, even consumers in the middle-class will struggle to pay their bills and the entire economy of the U.S. will suffer.
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By: Val W. Zimnicki
The free market punishes failure and rewards success. What can be fairer than that? Its counterpart, government bureaucracy, often does the reverse with its rules, regulations and mandates. The ups and downs in a true free market shake themselves off and allow any failures to try again. Free markets establish the value of goods and services. Conversely, bureaucratic central planners can only guess at product values. These uninformed administrators “who know what’s best for us” can only guess at product usefulness and will over-tax it.
A free market is the result of voluntary actions, not regulated directives. Ironically government mandates do not penalize those who make them and uninformed administrators are not held accountable for their bad decisions. Indeed, anti-business government resolutions often lead to promotions and bigger departments. Absurdly, government mistakes are rewarded with more government.
A free market is the result of voluntary actions by independent citizens. However, government approval of these goods and services is expensive and often takes a long time. Profit and loss are not important to government bureaucrats because there is plenty of money to print and even more to tax. Even unpalatable government services force the public to pay for them. This waste does not discourage federal and state agencies from their unnecessary protocols. This, of course, does not deter administrators from their unnecessary activity. After all, success, for them, is measured by the growth and size of the various government departments and their growing budgets. Waste grows government and is inherent in a bureaucracy.
High taxation is used to pay for this while simultaneously imprisoning economic and personal freedom.
The solution to growing government market intervention is to reduce taxes that support unnecessary government behemoths. Voting for fiscally responsible representatives is essential.
We should be allowed to buy whatever we want, to buy from whomever we want, and at market prices. Some think this is too much freedom and prefer to be told how we should lead our lives while being overtaxed doing it. They often work in government jobs.
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By: Val W. Zimnicki
Bureaucracy is the main poison in our republic. It is self-perpetuating, freedom-robbing and very expensive. As George Washington put it; “Government….is force….it is a dangerous servant and a fearful master.” America’s forefathers therefore created a Constitution that does not give authority to deal with the many costly administrative services we have become accustomed to. Some of these federal programs include the Department of Energy, Department of Commerce, Department of Transportation, Department of Education, and many more.
Let’s take the Department of Education as an example. This year’s budget is $7 billion. Of course, we did not have a education department until president Carter created one to appease the teachers unions. Have education problems been solved because of this unnecessary monstrous creation? No, and indeed many new artificial and costly difficulties have been created.
Simply put, students are dumber than ever. Of course, the good news for administrators is that thousands have unessential and redundant jobs. These government officials typically want their agendas to grow in scope. More employees mean bigger budgets, which means more importance. These bureaucrats are not subject to profit-and-loss accountability and they frequently prove it. After all, money can always be raised by taxing the good citizens of the U.S. When a program fails, as most do, the cry of being underfunded is raised. Raising taxes to pay for failures is standard operating procedure. That’s the bureaucratic way.
Problems caused by expensive government cannot be solved by growing more government. Yet, federal and state governments continue to raise taxes to pay for their failures. The Department of Education is just one of thousands of costly misadventures that stifle economic growth and keep the static government employees occupied with ‘busy work.’