Just recently I was thinking that at the very least, libertarians have made progress in causing people to see that inflation is caused by the government — specifically the Federal Reserve — and not by the private sector.

And then President Biden comes forward and damages my optimism! 

According to an article in the Washington Post, Biden is “considering whether to escalate an attack on parts of corporate America over rising prices…. The administration would amplify criticisms of large firms in heavily concentrated industries for passing higher prices on to consumers as they benefit from high profits”

According to the article, “The White House took a step in this direction earlier this week, with Biden urging the Federal Trade Commission to escalate its investigation of anti-competitive behavior in the oil and gas industry, which the president alleged was leading to higher prices for drivers at the pump.”

All we need now are Richard Nixon-era wage and price controls and Gerald Ford-era “Whip Inflation Now” buttons and the inflation problem will be resolved. And just think — we can have those long lines at the gas stations all over again, just like in the 1970s. 

Does Biden really believe that people will fall for this nonsense? Yep!

Ever since he became president, Biden has been spending money like there was no tomorrow. Like his predecessor Donald Trump, he has been spending much more than what the federal government brings in with taxes. That means the government has to borrow the difference.

That means an ever-increasing debt load for the federal government. The federal government’s debt is now almost $29 trillion.

To repay that debt, one option would be to tax everyone. According to U.S.debtclock.org (an impressive website I recommend looking at), that would amount to $229,705 per taxpayer.

Obviously, taxing people to pay off that debt would not be a popular thing to do. So, that’s where the Federal Reserve comes into play. It pays off that debt in cheapened, debased dollars. In the process, prices rise to reflect the debased value of everyone’s money. Inflation is a government’s surreptitious, fraudulent way to tax people. 

That’s what the Fed has done ever since it was established in 1913. That’s why silver coins no longer circulate. The Fed printed so much paper money that it drove them out of circulation, leaving us with cheap alloyed coins.

That’s why the Fed was established in the first place — to accommodate the massive amounts of money that were to be spent on the welfare-warfare state in the decades ahead.

It’s nothing new. Government officials have been inflating the money supply for centuries as a way to finance out-of-control federal spending. It’s actually a fantastic way to plunder the citizenry. When prices start rising, public officials can blame greedy, profit-seeking entrepreneurs in the private sector, just as Biden is now doing. Since people don’t understand that rising prices are the result of a debased currency, they go along with the scam and support wage and price controls and enthusiastically wear WIN buttons.

When public officials were sending people those stimulus checks, they were saying that it was “free” money.” Here at FFF, we rained on that parade by saying that it wasn’t going to be free in the long run. Today, with prices soaring at the gas pump, the grocery store, and most everywhere else, people are figuring out that we were right — that those stimulus checks weren’t free after all. 

Let’s just hope that this time around, more people recognize that it’s the Federal Reserve that is the culprit, not the private sector. In that way, we get closer to restoring a sound free-market monetary system, one that necessarily entails abolishing the Fed.

This article was originally published at the Future of Freedom Foundation and is republished here with permission.

Jacob Hornberger
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