Ron Paul Talks Tea Party
04/27/2010 3 Comments
The first wave of the Revolution began in 2007/2008 when Paul started to rally anti-establishment folks in a grassroots Campaign For Liberty. The Tea Party protests parallel, for the most part, Paul’s thoughts on limited government, sound money, and individual liberty. No doubt there are plenty of morons that make the Tea Party look like the Joke Party by holding up incendiary signs that personally attack Obama and his cohorts or by vocally supporting a “strong” military presence and useless wars. It’d be great if Palin and other faux campaigners for liberty are marginalized within the movement. If that happens, I think there will be a lot of promise in the coming years for limiting the government.
I don’t understand why it is that there are people from the heartland who want to return to the gold standard. Remember Populist leader William Jennings Bryan who said that the people there were being “crucified on a cross of gold”? The fiat monetary system is ideal. It is the purest money. The Chartalists have the most sound theory about how money has value – money has value not because it is made of valuable material or is backed by valuable material, it’s because governments order people to pay taxes in that. In days of yore people have to pay in gold, so they had to get that gold. It doesn’t matter what the token is, if you must pay taxes in the token, you must get some of those tokens, even if it’s made of paper, plastic or it it’s a binary sequence in RAM on some computer!
If your money is dependent on a backing material, then the whole economy is dependent on what goes in with that material, whether new material is found or not found. When the economy grows, the money supply needs to grow. If the money supply needs to grow but can’t because it’s gold-backed, then it’s waste.
Most money is created through government spending. Governments cannot go bankrupt because it will always pay matured bonds because it creates the money. There won’t be an inflation problem so long as aggregate demand doesn’t increase too much because everyone’s pay doubles for instance all of a sudden. If aggregate demand drops significantly, the government must create more money, must increase the deficit. Government debt will never be paid, all that’s required is to roll it over. Now there is a cost of too much deficit spending if spending is done wastefully like spending a fortune on maintaining bases everywhere and paying Blackwater a fortune and all of the money lost because of corruption, but that’s another issue.
The Chinese threat is overstated. They must buy treasuries because there’s little choice, they get dollars for the stuff that goes on Wal Mart shelves. If the U.S. shrinks its internal market in a bid to decrease deficit because it fears China not buying bonds, then they’ll make China sell less to the U.S. and they will buy fewer treasuries. China of course could decide to not buy so many treasuries and instead buy American companies. They could take over so many companies and own much of the U.S. I suppose that’s the worst thing they can do.
By the way, there’s a prominent Chartalist who is trying to drum up support for his cause at the Tea Parties of all places! So some of them are told to go gold standard, there’s this Chartalist fiat money advocate getting them to go along with that. In Canada there was a movement in the prairies especially called Social Credit that was for printing money to help the farmers. Amazing how that’s changed, how the Conservative Reform which became Conservatives and their predecessors Progressive Conservatives had become tight money advocates – what has happened to people on the prairies?