Of course governments do not want a fixed monetary policy. The Fed board of governors does not want to be replaced by a laptop computer. Nor do politicians want to give up the power to be expedient and irresponsible with other people's money—all in the name of good intentions, of course. They have a vested interest in inflation. They do not want a system that would restrain the lavish spending that buys voter support for their reelections. They do not want to give up playing god with the economy and the populace. Their good intentions for both can be financed in only two ways: 1) by taking money away from the people (taxation), or 2) by taking value away from the money (inflation). Taxation is not sufficient; there is no way the voters would accept taxes high enough to equal what they lose through inflation that finances the politicians' schemes.
Saturday, August 9, 2008
Another detail of the case against elected government
Mortgage Crisis, the Dollar and its Future, Part 1