• Tom Cleary

Peace Through Hard Money

The main strategy to obtaining peace is to systematically strip the government of the means to wage war. There are many tactics that we can employ to help further this strategy. One of the very best tactics is to starve the imperial beast of the financing needed to wage war and maintain an empire. The way to do that is to dismantle the Federal Reserve and go back on the gold standard. This would cut the heart out the empire's ability to maintain itself.

There are multiple reasons to dismantle the Federal Reserve. For one thing its activities create the business cycle. For another its activities immorally enrich politically connected elites at the expense of the rest of society, as I explained here. For purposes of this discussion the most important reason to dismantle the Federal Reserve is to end the government's ability to disguise how great the tax burden is on the productive economy.

Think of dollar bills as titles to property. That's all money really is, a claim on real goods and services. What makes a real economy work is the production of more goods and services by becoming more productive. In a hard money/gold standard environment money is an honest claim on goods and services. It is simply a medium of exchange, nothing more. In such a stable money environment prices over time drift downward because goods and services are produced in greater quantities and money is not growing.

In such an environment whatever government takes from society it does so in an open way. There is no way to hide the tax burden. However, if you create more money, that is additional claims to real goods and services without creating more goods and services then you are drawing more goods to the government than is readily apparent. In the process you make prices higher than they would be otherwise and create all the negative consequences discussed above. All this occurs relatively unseen by the average citizen who is not aware of how any of this works.

This hides the true tax burden in a key way; by buying U.S. bonds and holding them they effectively take those bonds off the market thereby raising the value of the remaining bonds thus lowering interest rates. Lowering the interest rate feeds the needs of the politically connected elements of the economy who live off cheap debt and it massively lowers the amount of debt service the government must pay every year. Currently, long-term rates are artificially held at about 1%, this results in about $250 Billion of debt service yearly in the federal budget. If rates were set by the market and went to a more historical norm of say 5%, then the debt service would explode to about $1.25 TRILLION, eating up a quarter of the federal budget. This would expose the painful reality of what the federal burden really is.

Since prior to the Trump tax cuts, the U.S. government was borrowing 40 cents of every dollar it spends, what the Fed does is crucial to U.S government financing. That this is crucial can be seen by the fact that the Fed is the single biggest public owner of U.S debt at about $2.5 Trillion. In doing this Fed hides the true tax burden by artificially lowering the interest rate and by laying claim to real economic goods without exchanging other real goods. The process is well outlined here.

If this burden were exposed then the government would face an angry electorate. Think of how angry you would get if your direct tax burden went up by 40%, or if interest on the debt became the single biggest line item in the federal budget. There would be a massive reaction to this state of affairs. The electorate would then demand that the federal government re-prioritize spending from the military and foreign affairs to domestic wants. It's not that this domestic spending is harmless, obviously it is economically damaging. The point, though, is that people would demand a diminished role for the U.S. overseas, resulting in a reduction in imperial activities.

The gold standard would also create other benefits as well; an end to the government induced boom and bust cycle, make domestic spending more accountable by exposing the true burden of it as well. It would also create international conditions more favorable to honest free trade and likely promote a virtuous cycle of other nations moving to this monetary standard as well. This would serve to more tightly interlock the world economy in a mutually beneficial interdependence that makes trade not war much more likely.

Cutting the heart out of the government's ability to stealthily expropriate our wealth and use it to export death, that only serves the imperial elite will greatly diminish the ability of the empire to so egregiously violate the rights and dignities of God's children. This can only serve to put us on the right side of God's plan for His children and further the in breaking of His Kingdom into this world.

Praise Be to God

#Peace #Policy #Economy

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