Wednesday, February 17, 2010

Slow-frying the taxpayer, over and over

Some years ago I wrote an article about the passage of The Current Tax Payment Act of 1943, a.k.a., withholding. Even as the plan was being sold to Americans as a public benefit, their elected representatives in D.C. were gloating over how this new bill would allow them to "fry" whatever revenues they wanted out of the taxpayer. Any suggestion that this was the real motive behind the law, of course, was dismissed as a conspiracy theory, and a pernicious one at that, since the government was engaged in another war.

As insidious as withholding is, it is not without competition. In fact, it bows humbly to the true master of monetary evil, The Fed. At least withholding is done in plain sight. You can look at your paycheck stub and see how much the government has taken. We never really know how much the Fed steals since it works in secret, which it prefers to call "independence." The Fed poses as our protector against the "tax" of inflation while using monetary inflation to divert wealth to the biggest banks and the government. Most people don't understand how the Fed works or why we even have it, since the country thrived for well over a century without it. As for all those pre-1913 panics necessitating a central bank, read Rothbard (Pdf); we needed honest (full-reserve) banking, not a banking cartel.

Ron Paul is someone who certainly understands what the Fed is up to. In a recent post, he questions the ties between the new crop of defaulting governments, Goldman Sachs, and the Fed. He writes:
Greece is only the latest in a series of countries that have faced this type of crisis in recent memory. Not too long ago the same types of fears were mounting about Dubai, and before that, Iceland. Several other countries (Spain, Portugal, Ireland, Latvia) are approaching crisis levels with public debt as well. Many have strong ties to Goldman Sachs and the case could easily be made that default could have serious implications for big US banking cartels. Considering the ties between the Fed and these big banks, it is not outlandish to wonder if the US taxpayer is secretly bailing out the entire world, country by country, even as our real unemployment tops 20 percent. Unless laws are changed to allow a complete and meaningful audit of the Federal Reserve, including its agreements with foreign central banks, we might never know if this is occurring or not. . . .

Because of our globe-straddling empire and lingering reserve currency status, perhaps no one has a more vested interest in keeping this system cobbled together than our own government and the Federal Reserve. The agreements that Iceland and Dubai and Greece have negotiated can amount to little more than kicking the can down the road, as their overall spending habits remain largely intact, fiat currencies are still legal tender and more debt is issued on top of unsustainable debt. The American people have the right to know if they are going to be the ones holding the bag in the end because the Federal Reserve secretly put them on the hook for it. This knowledge would be a key factor in peacefully dismantling this immoral and unconstitutional system.

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