The Founders Warned Us About the Fed

The Founders Warned Us About the Fed

The Federal Reserve just lowered interest rates for the second time this year and announced more quantitative easing by injecting even more U.S. dollars into the market. The days of cheap money will soon come to an end, and I fear that many people won’t realize what’s happening until the rug is pulled out from under them.

As economist Henry Hazlitt wrote, the practices of the Fed distort the real-world market indicators of cost, future prices, investments and production. A recent study from the National Association for Business Economics showed that 72 percent of economists now predict that a recession will occur between 2020 and the end of 2021. Some have even warned that the U.S. is on the brink of the biggest bubble in world history — not just a correction of a business cycle or another recession, but a complete collapse of the U.S. dollar.

Yet the dangers of centralized banking are not new knowledge. For centuries, people (including many of our founding fathers) have tried to warn us of the numerous threats posed by institutions like the Federal Reserve.

Today, it’s understood by many that the recklessness of the Fed allowed for the subprime mortgages that caused the Great Recession of 2008. With over $22 trillion in debt, $120 trillion in unfunded liabilities, and, soon, an all-time high debt-to-GDP ratio (comparable to World War II levels), however, it’s not overstating it to say that the Fed-facilitated out-of-control federal government spending constitutes the greatest threat to the American way of life in history.

To understand the full extent of the debt and the destruction of the dollar, it’s essential to realize that paper money has a history of being printed as bills of credit to finance runaway government. In 1775, the Founders attempted to use paper money without gold or silver backing, and they found that the inflation robbed them of any value. In 1788, Thomas Jefferson wrote, “Paper is poverty. It is only the ghost of money, and not money itself.”

The Coinage Act of 1792 then set specific ratios for gold and silver coinage, placing gold and silver in control rather than a central bank. This lasted until the passage of the Federal Reserve Act of 1913, which allowed for the formation of the Federal Reserve System just two decades before Pres. Franklin D. Roosevelt started to come after private ownership of gold and silver in the 1930s. In 1944, the Bretton Woods system made the U.S. dollar the reserve currency of the world, when it was still partially backed by gold and silver.

Finally, in 1971, the Nixon Administration suspended wages, issued price controls, and canceled dollar-to-gold convertibility, completing the final step in ending the “gold standard.” This gave the central government planners — and the federal reserve — the power to print money without restraint. This is how the national debt has been able to reach the levels that it has. The only thing backing the U.S. dollar today is public debt.

Remember when Coke was a nickel? In 1913 (the year the Fed was founded) a bottle of Coke cost five cents. Today, a bottle of Coca-Cola costs an average of $1.79. While there are many factors (like supply and demand, cost of goods, etc.) that help set prices, inflation plays a critical part. At an average inflation rate of 3.12 percent annually, inflation alone accounts for $1.30 of the actual cost of Coke.

The addition of more U.S. dollars doesn’t mean that anyone is more wealthy; in fact, it means that the dollars you have are worth less. You will need a higher amount of dollars to buy the same goods and services. Hence, saving inflated dollars, in many cases, is losing value. Those who save money are being robbed.

With the continued decline of the dollar, there could also be hyperinflation on an unprecedented scale. Both James Madison and Thomas Jefferson warned that “the greatest threat to be feared” was the “public curse” of “public debt”, and that “banking establishments are more dangerous than standing armies.” The founding fathers understood the dangers of centralized manipulation of the money supply, the hidden taxation of inflation, and the control of buying power. They understood that gold and silver are real money.

Furthermore, if we look at the history of money, we can see that precious metals, mainly gold and silver, have been used for coinage for over 2600 years; in one way or another, gold and silver have been used by people for over 6000 years.

American revolutionary leader Christopher Gadsden once said in Sept. 1764 that “The evils attending a wanton exercise of power, in some of the colonies, by issuing a redundancy of paper currency, has always been avoided by this province, by a proper attention to the dangerous consequences of such a practice, and the fatal influence it must have upon public credit.”

People across the U.S. should heed his warnings by allowing gold and silver to be used as legal tender once again. Some states like Utah have done just that. While this won’t stop the Federal Reserve’s destruction of the dollar, it will allow people to convert dollars to sound money before a collapse. Sound money, like gold and silver, acts as a check and balance on big government, a hedge against inflation, and a way to combat manipulation by the Fed.

This is exactly why, in my home state, I will soon be filing the “2020 South Carolina Sound Money Bill”, allowing South Carolinians to use gold and silver as legal tender. I will also introduce legislation to exempt gold and silver from capital gains tax, both of which are already exempt from sales tax in South Carolina. We the People can restore sound money by using the Ninth and Tenth Amendments to the U.S. Constitution.

It is my hope that, with the success of these bills, other policymakers elsewhere will become inspired to lead by example on this vital issue as well. The key to protecting the American way of life from the federal reserve’s obliteration of our currency rests with the legislatures, but we must heed the lessons of history now.

Republished with permission from The Tenth Amendment Center.

How the Market Is Already Repealing Obamacare

How the Market Is Already Repealing Obamacare

There’s a common misconception that if you’re opposed to government services, programs and/or departments, then you’re opposed to building roads, education, people getting affordable health care and even people taking care of the sick and elderly. These misconceptions are becoming more apparent as the free market offers solutions and options using innovation and technology, as the government continues to fall in on itself.

Six months into the pregnancy, we received a letter explaining that due to the changes in the law, our policy would no longer cover maternity services.

I continue to be amazed at the ingenuity of people and individuals working toward solutions in the marketplace, in spite of government. Over time government has assumed more and more control over medical decisions that individuals make everyday.

My Own Experience

I have paid my dentist out of pocket for many years and had private insurance for major medical only. In 2011, my wife and I were expecting our first child and had private health insurance which was slowly being limited more and more by regulations from the Affordable Care Act and Patient Protection Act. It was dreadful!

Six months into the pregnancy, we received a letter explaining that due to the changes in the law, our policy would no longer cover maternity or OB-GYN services. This meant that our insurance would no longer pay for anything related to the birth of our daughter. We searched and shopped for insurance that would help cover the cost of the hospital and birth, but the more government regulations and controls were placed on the market, the more difficult it became to actually get affordable medical insurance and health care.

We spoke with our doctor about it and found that by avoiding insurance altogether and paying the doctor directly, it reduced all costs associated with pregnancy by 60%. We avoided the government-burdened insurance market and paid the doctor directly.

This model of doctors and patients actually working out agreements and paying a flat fee in exchange for medical services is actually very effective. If we could only bypass the government regulations and laws on health care, more people would get better service at a more affordable rate.

Market-Based Medicine

One awesome example of markets finding ways around the government’s stronghold on medical services is the Surgery Center of Oklahoma. In order to run their own practice with the least amount of government interference as possible, two doctors formed this practice 15 years ago. The goal was to eliminate the inefficiencies that accompany hospital networks and Medicare/Medicaid networks in order to run their own practice. The practice has done so well, that it has grown to over 40 doctors now.

According to them:

It is no secret to anyone that the pricing of surgical services is at the top of the list of problems in our dysfunctional healthcare system. Bureaucracy at the insurance and hospital levels, cost shifting and the absence of free market principles are among the culprits for what has caused surgical care in the United States to be cost prohibitive. As more and more patients find themselves paying more and more out of pocket, it is clear that something must change. We believe that a very different approach is necessary, one involving transparent and direct pricing.”

This has allowed them the ability to perform the best quality surgeries at the lowest and most transparent cost. All of their procedures and costs appear on their website. By bringing this level of transparency to the public, it has forced a price war for surrounding hospitals to post prices for procedures, something that is often hidden. This has brought costs down in surrounding areas.

Exiting the rat race of hospital networks and eliminating acceptance of government payments has allowed them to cut the cost and provide a better service.

In spite of what government does, people around the country are finding ways to lower costs and raise quality in the most competitive and realistic manners.

Flat Fee Memberships

The difficulties with getting health care at affordable rates come not from marketplace inadequacies, but from government regulations.

Another great example, are physician’s offices like Irmo Primary Care, Gold Standard Pediatrics and many others that are starting flat fee pricing for memberships and monthly medical services called Direct Primary Care. These practices are helping to once again bring patients and doctors together without interference from government and bureaucratic middlemen. I love streamlining services!

Dr. Bryan Hill, a South Carolina pediatrician, opened his direct primary care practice in September. “Instead of accepting insurance for routine visits and drugs, these practices charge a monthly membership fee that covers most of what the average patient needs, including visits and drugs at much lower prices.”

It’s sad that most of the difficulties with getting good health care at affordable rates come not from inadequacies in the marketplace, but from the many regulations by central planners in government.

History has shown us that free-market forces have the ability to lower costs and increase quality while fostering new growth and innovation. It puts the power in the hands of consumers, where it should be. If government would just get out of the way, then the free-market can fix the problems with healthcare.

Reprinted with permission from FEE.

Daylight Saving Began as ‘War Time’

Daylight Saving Began as ‘War Time’

Benjamin Franklin once joked in his 1784 essay “An Economical Project for Diminishing the Cost of Light” that candle usage could be economized by changing the time and getting people out of bed earlier. Unfortunately, those in government took this seriously and have attempted to manipulate time for its own control.

History of Time

In fact, government’s attempts at controlling time and the implementation of daylight saving time was started to support war. Daylight saving time (DST) or “Fast Time” as it was first introduced in the United States in 1918 was signed into law by President Woodrow Wilson in order to support World War I. Seven months later it was repealed by the majority of the states. Until President Franklin D. Roosevelt instituted year-round “War Time” in 1942. That’s right, even daylight saving time was instituted and enforced to promote war.

People are less productive when they lose an hour of sleep and are more prone to accidents while they’re adjusting.

In 1966 Congress passed the Uniform Time Act establishing uniform times for starting and ending “War Time” or DST. States still had the ability to set their own standards under the 9th and 10th Amendments to the United States Constitution.

In 1974 and 1975, President Richard Nixon signed into law the Emergency Daylight Saving Time Energy Conservation Act and enforced extended periods of daylight saving time in an effort to control energy usage during trade embargos of oil.

A total of 70 countries take part in changing clocks twice a year, recognizing some form of daylight saving time. It’s total madness.

Questionable Benefits

While the federal government has made the argument that energy savings stem from the time change, independent studies have measured a loss in productivity. People are less productive when they lose an hour of sleep and are therefore more prone to accidents while their bodies are adjusting.

Independent studies have found that sleep efficiency was reduced by 10%, car accidents increased by 17%, heart attacks increased by 25% and the change in time resulted in $434 million in lost production and medical expenses within the first week of the time change.

There are also parallels between government’s control and manipulation of time and currency. Regardless of the government’s manipulation, changing the time of day does not mean that there’s more time in a day, nor does printing more dollars mean an increase in buying power. In fact, government intervention in time and currency creates more problems than anything. It’s time that we abolish Daylight Saving Time.

Reprinted with permission from FEE.

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