Patriot,

Last week, Congress passed yet another bill to continue
unsustainable government spending with no reforms. This was
supposedly to avert a government shutdown, but since the
extension was only for one week, we're just going to hear the
very same talk about the "emergency" again this week.

We have heard this story so many times, it has become tiresome.
Nobody expects resistance from enough Republicans - the party
that talks the talk but doesn't walk the walk on fiscal restraint
- to make a difference in upcoming budget deals.

Time and again, Congress has proven itself incapable of reining
in its spending. And as I point out in my newest column - read it
below - because the Federal Reserve can purchase government debt
instruments such as Treasury securities, there's nothing to stop
Congress from spending us into oblivion.

As I also note in my column, not only are the Fed's policies
responsible for our government debt crisis, it's also responsible
for our consumer debt crisis. Because the Fed creates inflation,
constantly stealing from the value of the dollar, Americans have
little incentive to save money.

It is the Fed that is the root cause of our country's financial
problems. That is why it is so critical we Audit (and then End!)
the Fed.

Even if you have done so in the past, take a moment to send a
message to your lawmakers to Audit the Fed!

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And if you support Campaign for Liberty's continued efforts to
rein in the out-of-control Federal Reserve, please support
Campaign for Liberty with a contribution.
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For Liberty,

Ron Paul


Federal Reserve Responsibility for Consumer and Government Debt
Crises

According to the Federal Reserve, credit card delinquencies
increased by 50 percent in 2023, while consumer debt grew to 17.5
trillion dollars. A recent survey by Clever Real Estate found
that three in five Americans have credit card debt and that 23
percent of Americans increase their credit card debt every month.
The survey also found that 48 percent of Americans (including 59
percent of millennials) use credit cards for essential living
expenses.

The overreliance on credit cards and the accompanying increase in
consumer debt are consequences of our fiat money system. Since
Richard Nixon severed the last link between the dollar and gold
in August of 1971, the dollar's value has declined by 87 percent
based on the government's understated Consumer Price Index
numbers. This means that even though Americans' nominal wages
have increased, their real wages have declined as their dollars
buy less.

The continuing erosion of the dollar's value makes it impossible
for many Americans to accumulate meaningful savings. Those
Americans who can save may actually lose money by doing so thanks
to the Federal Reserve's inflation tax that erodes the value of
savings. This is why Congress has felt it necessary to provide
tax incentives to encourage saving for things like retirement,
education, and health care.

Congress could help protect Americans from the inflation tax by
forbidding the Federal Reserve from purchasing government debt
instruments such as Treasury securities. However, since this
would end Congress's ability to run up huge deficits, thus
forcing it to pare back the welfare-warfare state, it is unlikely
such legislation would pass.

The reliance of so many Americans on credit cards for basic
necessities is one reason why many Americans are dissatisfied
with the economy. The large amount of consumer debt is also a
reason the Federal Reserve will not increase interest rates to
anywhere near what they would be in a free market. The problem is
compounded by the fact that investors and businesses have become
addicted to near zero or at zero interest rates.

The Fed's relatively modest rate increases over the last couple
years caused many "experts" to warn that the Fed was going to
throw the economy into a recession. The Fed, though, has been
able to claim recession has been avoided because the Fed kept the
rates relatively low, and because government statistics are
manipulated to understate the real rates of unemployment and
inflation.

The Fed cannot indefinitely keep interest rates low without
causing a dollar crisis. This will either be caused by, or result
in, a rejection of the dollar's world reserve currency status. At
that point, interest rates will skyrocket and consumers and
businesses that have been relying on debt to cope with the Fed's
dollar destruction will find the piper at their doors, demanding
to be paid.

The economic crisis will be worsened by the moral crisis caused
by the belief among too many Americans at all levels of society
that they have a right to government-provided economic security
at the expense of their fellow citizens. This will result in
violence and the growth of authoritarian political movements.

The collapse of the fiat money system and the accompanying
welfare-warfare state also provide an opportunity for those of us
who understand the truth to build a society based around the
principles of liberty. We must continue our efforts to reach a
critical mass of people with the message of liberty while making
plans to ensure our families can take care of themselves when the
next crash occurs.
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If you would like to make a donation by mail, please send your
check to Campaign for Liberty, PO Box 104, Lake Jackson TX 77566
or you can call 703-865-7162.

The mission of Campaign for Liberty is to promote and defend the
great American principles of individual liberty, constitutional
government, sound money, free markets, and a constitutional
foreign policy, by means of education, issue advocacy, and
grassroots mobilization.

© Campaign for Liberty, 2012. Paid for by Campaign for Liberty
and not authorized by any candidate or candidate's committee.

Because of Campaign For Liberty's tax-exempt status under IRC
Sec. 501(C)(4) and its state and federal legislative activities,
contributions are not tax deductible as charitable contributions
(IRC § 170) or as business deductions (IRC §
162(e)(1)).

www.CampaignForLiberty.org


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