Peering into the Abyss
by Peter Schiff
...Washington is telling us that our problems result from a lack of consumer spending. Therefore, the solution is for government spending to pick up the slack. However, if Americans are too broke to spend, then how can our government spend for us? The only money they have is taken from us through taxation. To postpone immediate tax hikes (adding interest for good measure), Washington plans to borrow more from abroad. However, if our foreign creditors refuse to pony up, much of the money will simply be printed instead.
Printing money is merely taxation in another form. Rather than robbing citizens 
of their money, government robs their money of its purchasing power. Many people assume that if government provides the funds we can spend our way back to prosperity. However, it’s not money we lack but production. If the government simply prints money and doles it out, we will not be able to buy more stuff; we will simply pay higher prices. The only way to buy more is to produce more. It is production that creates purchasing power, not the printing press!
Our current predicament resulted in part from our efforts to maintain consumer spending at unsustainable levels, primarily by the reckless extension of consumer credit. Pushing up consumer credit to levels not supported by market realities required government subsidies and guarantees. In addition, Wall Street pitched in with securitization and credit default swaps, which created a false sense of confidence among our creditors that high-risk consumer loans could actually be repaid. However, now that all those gimmicks have blown up, the entire farce has been exposed.
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http://www.lewrockwell.com/schiff/schiff10.html
of their money, government robs their money of its purchasing power. Many people assume that if government provides the funds we can spend our way back to prosperity. However, it’s not money we lack but production. If the government simply prints money and doles it out, we will not be able to buy more stuff; we will simply pay higher prices. The only way to buy more is to produce more. It is production that creates purchasing power, not the printing press!
2 comments:
This entire sick charade goes back to the truths outlined in Rushdoony's dangerous book Larceny in the Heart. Now I learn the federal government are busy about enticing foreign investments into our depressed housing market. Conveniently, much of the money fronted to fund high risk mortgages came from Chinese investors. Those loans, many now in default, have now been "backed" by our tax dollars. Now the housing market is severely depressed, Chinese individuals and firms are coming here and investing in some of those same houses, now foreclosed upon and on offer at "fire sale" pricing. They will thus have profitted several ways, first in the original bogus mortgages, and now by buying those same properties deeply discounted now they've been foreclosed. Surely they will also profit yet again as they run the market back up, having got control over large portions of it. And our "government" loves to have it thus. Meanwhile, the presses roll on, manufacturing "money" with nothing of value behind it, flooding the money supply with a trillion "dollars". Tea party, anyone? Its well past time....
I just came across the most amazing interview, Bill Moyer with William Black, who was one of the people who examined the Savings and Loan crisis twenty years back, and Mr. Black has some astounding insight into the present "crisis". I'd recommend your watching this one, and perhaps sharing it on the blog... it fits right in with much of what I've seen here already. Mr. Black is a professor of economics at the University of Missouri.. very astute. Me also NAILS absolutely the real root of the problem.. he gets to it fairly late in the interview, but he makes no room for getting round it.... the moral collapse of those in high places, in both government and the financial industry. THIS should be broadcast on mainstream network news, every night for a week, in the hope that a significant number of Americans see it and GET MAD enough to force our government officials to either deal with their mess or get out of the way so those who will, can.
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