The next time one of your friends or socialistic debaters says “Name one place where
Anarcho-Capitalism has been tried.” you can now proudly respond “The
Republic of Cospaia.”
For nearly four hundred years, this tiny republic
thrived in central Italy with no government, no rulers, no military, no
bureaucracy, and no taxes!
Cospaia’s success is an unlikely story
that illustrates how remarkably little is required for prosperity.
Although it’s called a “Republic” it’s only in the sense that a council
of elders with no enforcement power occasionally met in the church. This
landlocked territory had an area of only 815 acres,
about the size of a large farm. The population varied over the centuries
but was usually around 300 people, with less than 100 households. In
the beginning the population was illiterate, with the exception of the
parish priest. The republic was never invaded, or placed under the
control of a foreign power, except for a brief period during the
Napoleonic Wars (a conflict they survived). Despite being a landlocked
territory, with a largely uneducated population, removed from major
trade routes, Cospaia thrived and became the envy of its neighbors,
because for neatly four hundred years they avoided the oppressive hand
of government.
The story of Cospaia begins in 1440. During this period the Italian
peninsula was composed of numerous small kingdoms. One of these kingdoms
was known as the Papal States, and was ruled by the Pope in Rome. Its
neighbor to the north was the Republic of Florence, ruled by the Medici
Family. In 1431 Eugene IV was elected Pope and took out a loan of 25,000
gold Florins from Cosimo di Giovanni de’ Medici, lead banker of the day and Chief Power broker of the Republic of
Florence. This was not an era of central banking and fiat currencies, so
even governments had to put up collateral if they wanted a loan. So,
the Pope put up the town of Borgo Sansepolcro and its surroundings in
the Upper Tiber Valley as collateral against the loan. Imagine President
Obama putting up California as collateral to the Chinese to pay for
Obama Care. Not that I'm sure he wouldn't try but that's beside the point.
After 10 years the Papal States defaulted on their loan and surveyors
from both Florence and the Papal States agreed that one of the new
boundaries between the states would be a “Rio” a.k.a. river,on
the upper Tiber. But the surveyors made a mistake. There was more than
one river in the region. An upper tributary split into two right where
the village of Cospaia was located.
Even though the residents of Cospaia were illiterate, they realized
right away their good fortune. Since they now found themselves outside
the jurisdiction of both the Papal States and the Republic of Florence.
The people of Cospaia quickly declared themselves an independent
Republic. The rulers of both the Papal States and the Republic of
Florence saw the value in having a “buffer state” between their lands,
and neither pushed to have Cospaia incorporated into their states. Thus
began 385 years of blissful anarchy.
In the beginning the economy of Cospaia was based on barter. Despite
their lack of hard currency or education the people of Cospaia were
better off than the neighboring villages under the rule of a state. As
an Anarchist Republic they had no taxes to pay, no arbitrary rules
imposed by rulers to benefit the well connected. The men of Cospaia were
not conscripted to fight in wars for Rome or Florence, and since they
had no rulers to represent them they had no one to get them involved in
entangling alliances which could backfire and draw them into war. The
inhabitants of Cospaia were free to pursue their trades and raise their
families in the manner they saw fit. Being without rulers allowed people
to pursue the most profitable use of their time and energy.
In 1574 the people of Cospaia discovered an extremely profitable use
of their time and talent. A crop from the new world was introduced that
influences the region to this day. The crop was tobacco. Tobacco has
been extremely popular throughout history, everywhere it has been
introduced, and Renaissance Italy was no exception. Cospaia soon became
known for high quality tobacco.
Adding to the demand for the crop were
the restrictions imposed by states in the Italian peninsula on the
cultivation and use of tobacco. Many people think that the prohibition
of tobacco use is a 20th century invention, however the morality police
were alive and well during the 17th century as well. In 1624 Pope Urban
VIII issued a papal bull making the use of tobacco in any holy place
punishable by excommunication. The prohibition remained in place until
1724 when it was abolished by Pope Benedict VIII. Of course the
regulations against tobacco only helped the Cospaian economy, the
decrease in supply and absence of any regulations or tariffs made
Cospaia a hub of the tobacco trade. Soon warehouses were set up to take
advantage of the lucrative trade. Many of these warehouse were run by
Jews from Genoa, Livorno, Civitavecchia, Naples, and Ancona. Jews in
Italy were a persecuted and closely watched minority by the surrounding
states. At various times they were forbidden from owning property, and
restricted from trading with Christians. So the laissez faire economy of
Cospaia allowed this persecuted minority to survive and thrive despite
the aggression of the surrounding states.
Throughout its history Cospaia had no rulers, no judiciary, and no
written laws other than phrase “Perpetua et Firma Libertas,” which was
inscribed over their church in 1610. Roughly translated, “Eternal and
Firm Liberty.”
Disputes were handled by heads of families or the local priest. The
arbitrators were chosen for their integrity rather than political
connections. There’s no indication of Cospaia being a violent place. If
it were, the inhabitants would have joined the Papal States or the
Republic of Florence. Instead quite the opposite happened. People
flocked to Cospaia because it afforded them opportunities not available
in the neighboring states.
Cospaia is described as “lawless,” and inhabited by “smugglers,” of
course these accusations are true. Cospaia had no law except Perpetua et Firma Libertas.
Since nearly everything entering the Papal States or the Republic of
Florence was taxed, everything leaving Cospaia was “smuggled.” By the
18th century Cospaia had grown from a harmless little hamlet into a hub
of untaxed goods. Not only was it the tobacco capital of Italy, but
textiles, groceries, and other goods circulated untaxed via Cospaia. The
rulers of the surrounding states were naturally quite miffed that
someone was making money and they weren’t getting a cut. They began
calling Cospaia a “lawless den of smugglers.” There are reports that the
Pope and the Grand Duke of Tuscany corresponded about how to take care
of the “smuggling” problem. For most of Cospaia’s history they avoided
the wrath of their larger neighbors because they were small, and the
rulers of the surrounding states tended to have larger problems than the
minor loss of revenue they suffered from Cospaia’s free market.
In 1826 the state had finally had enough of the unqualified success
of Cospaia, and the Pope along with the Grand Duke of Tuscany starved
out the small Republic and forced the remaining 14 heads of households
to sign “the act of subjugation” ending 385 years of freedom and
Anarchy. As a compensation, each region was allowed to grow a half
million tobacco plants (their growth was prohibited elsewhere), the
residents were also given a silver coin with the Pope’s image.
The coin
came to be called the “papetto” combining the Italian words for Pope and
small, indicating how little they had received in exchange for their
freedom. To this day the people of Cospaia hold an annual festival to
celebrate the freedoms they once enjoyed. If you find yourself in Italy
checkout The Feast of Cospaia.
It is tempting to ask ourselves what might have happened if Cospaia
had remained free to the present day. Could they have survived into the
modern era like San Marino or Lichtenstein?
As tempting as these questions are, I think Cospaia still has important
lessons to teach us. After all they were an Anarchist Republic that
survived and thrived for 385 years. That’s 385 years with no taxes,
wars, rulers, or regulations. I challenge anyone to name a country with a
better record.
"If
you don't want a man unhappy politically, don't give him two sides to a
question to worry him; give him one. Better yet, give him none. Let him
forget there is such a thing as war. If the government is inefficient,
top-heavy, and tax-mad, better it be all those than that people worry
over it... Give the people contests they win by remembering the words to
more popular songs or the names of state capitals or how much corn Iowa
grew last year. Cram them full of noncombustible data, chock them so
damned full of 'facts' they feel stuffed, but absolutely 'brilliant'
with information. Then they'll feel they're thinking, they'll get a
sense of motion without moving. And they'll be happy, because facts of
that sort don't change." - Ray Bradbury, Fahrenheit 451
How do you change the way people think? You start by changing the words they use.
In totalitarian regimes (a.k.a. police states) where conformity and
compliance are enforced at the end of a loaded gun, the government
dictates what words can and cannot be used. In countries where the
police state hides behind a benevolent mask and disguises itself as
tolerance, the citizens censor themselves, policing their words and
thoughts to conform to the dictates of the mass mind.
Even when the motives behind this rigidly calibrated reorientation of
societal language appear well-intentioned by discouraging racism,
condemning violence, denouncing discrimination and hatred.Inevitably,
the end result is the same: intolerance and indoctrination.
It's political correctness disguised as tolerance, civility and love,
but what it really amounts to is the chilling of free speech and the
demonizing of viewpoints that run counter to the cultural elite.
As a society, we've become fearfully polite, careful to avoid offense,
and largely unwilling to be labeled intolerant, hateful, closed-minded
or any of the other toxic labels that carry a badge of shame today. The
result is a nation where no one says what they really think anymore, at
least if it runs counter to the prevailing views. Intolerance is the new
scarlet letter of our day, a badge to be worn in shame and humiliation,
deserving of society's fear, loathing and utter banishment from
society.
For those "haters" who dare to voice a different opinion, retribution is
swift: they will be shamed, shouted down, silenced, censored, fired,
cast out and generally relegated to the dust heap of ignorant,
mean-spirited bullies who are guilty of various "word crimes."
We have entered a new age where, as commentator Mark Steyn notes,
"we have to tiptoe around on ever thinner eggshells" and "the forces of
'tolerance' are intolerant of anything less than full-blown celebratory
approval."
In such a climate of intolerance, there can be no freedom speech, expression or thought.
Yet what the forces of political correctness fail to realize is that
they owe a debt to the so-called "haters" who have kept the First
Amendment robust. From swastika-wearing Neo-Nazis marching through Skokie, Illinois, and under aged cross burners to "God hates fags" protesters assembled near military funerals,
those who have inadvertently done the most to preserve the right to
freedom of speech for all have espoused views that were downright
unpopular, if not hateful.
Until recently, the U.S. Supreme Court has reiterated that the First
Amendment prevents the government from proscribing speech, or even
expressive conduct, because it disapproves of the ideas expressed.
However, that long-vaunted, Court-enforced tolerance for "intolerant"
speech has now given way to a paradigm in which the government can
discriminate freely against First Amendment activity that takes place
within a government forum. Justifying such discrimination as "government
speech," the Court ruled that the Texas Dept. of Motor Vehicles could refuse to issue specialty license plate designs featuring a Confederate battle flag. Why? Because it was deemed offensive.
These tactics are nothing new. This nation, birthed from puritanical
roots, has always struggled to balance its love of liberty with its
moralistic need to censor books, music, art, language, symbols etc. As
author Ray Bradbury notes, "There is more than one way to burn a book.
And the world is full of people running about with lit matches."
Indeed, thanks to the rise of political correctness, the population of
book burners, censors, and judges has greatly expanded over the years so
that they run the gamut from left-leaning to right-leaning and
everything in between. By eliminating words, phrases and symbols from
public discourse, the powers-that-be are sowing hate, distrust and
paranoia. In this way, by bottling up dissent, they are creating a
pressure cooker of stifled misery that will eventually blow.
For instance, the word "Christmas" is now taboo in the public schools,
as is the word "gun." Even childish drawings of soldiers result in
detention or suspension under rigid zero tolerance policies. On college
campuses, trigger warnings are being used to alert students to any
material they might read, see or hear that might upset them, while free
speech zones restrict anyone wishing to communicate a particular
viewpoint to a specially designated area on campus. Things have gotten
so bad that comedians such as Chris Rock and Jerry Seinfeld refuse to
perform stand-up routines to college crowds anymore.
Clearly, the country is undergoing a nervous breakdown, and the news
media is helping to push us to the brink of insanity by bombarding us
with wall to wall news coverage and news cycles that change every few
days.
In this way, it's difficult to think or debate, let alone stay focused
on one thing--namely, holding the government accountable to abiding by
the rule of law,and the powers that be understand this.
Regularly scheduled trivia and/or distractions keep the citizenry tuned
into the various breaking news headlines and entertainment spectacles
and tuned out to the government's steady encroachments on our freedoms.
These sleight-of-hand distractions and diversions are how you control a
population, either inadvertently or intentionally, advancing a political
agenda agenda without much opposition from the citizenry.
Professor Jacques Ellul studied this phenomenon of overwhelming news,
short memories and the use of propaganda to advance hidden agendas. "One
thought drives away another; old facts are chased by new ones," wrote
Ellul.
Under these conditions there can be no thought. And, in
fact, modern man does not think about current problems; he feels them.
He reacts, but he does not understand them any more than he takes
responsibility for them. He is even less capable of spotting any
inconsistency between successive facts; man's capacity to forget is
unlimited. This is one of the most important and useful points for the
propagandists, who can always be sure that a particular propaganda
theme, statement, or event will be forgotten within a few weeks.
Already, the outrage over the Charleston shooting and racism are fading
from the news headlines, yet the determination to censor the
Confederate symbol remains. Before long, we will censor it from our
thoughts, sanitize it from our history books, and eradicate it from our
monuments without even recalling why. The question, of course, is what's
next on the list to be banned?
It was for the sake of preserving individuality and independence that
James Madison, the author of the Bill of Rights, fought for a First
Amendment that protected the "minority" against the majority, ensuring
that even in the face of overwhelming pressure, a minority of one,even
one who espouses distasteful viewpoints,would still have the right to
speak freely, pray freely, assemble freely, challenge the government
freely, and broadcast his views in the press freely.
This freedom for those in the unpopular minority constitutes the
ultimate tolerance in a free society. Conversely, when we fail to abide
by Madison's dictates about greater tolerance for all viewpoints, no
matter how distasteful, the end result is always the same: an
indoctrinated, infantile citizenry that marches in lockstep with the
governmental regime.
Some of this past century's greatest dystopian literature shows what
happens when the populace is transformed into mindless automatons. In Ray Bradbury's Fahrenheit 451,
reading is banned and books are burned in order to suppress dissenting
ideas, while televised entertainment is used to anesthetize the populace
and render them easily pacified, distracted and controlled.
In Aldous Huxley's Brave New World,
serious literature, scientific thinking and experimentation are banned
as subversive, while critical thinking is discouraged through the use of
conditioning, social taboos and inferior education. Likewise,
expressions of individuality, independence and morality are viewed as
vulgar and abnormal.
And in George Orwell's 1984,
Big Brother does away with all undesirable and unnecessary words and
meanings, even going so far as to routinely rewrite history and punish
"thoughtcrimes." In this dystopian vision of the future, the Thought
Police serve as the eyes and ears of Big Brother, while the Ministry of
Peace deals with war and defense, the Ministry of Plenty deals with
economic affairs (rationing and starvation), the Ministry of Love deals
with law and order (torture and brainwashing), and the Ministry of Truth
deals with news, entertainment, education and art (propaganda). The
mottos of Oceania: WAR IS PEACE, FREEDOM IS SLAVERY, and IGNORANCE IS
STRENGTH.
All three--Bradbury, Huxley and Orwell--had an uncanny knack for
realizing the future, yet it is Orwell who best understood the power of
language to manipulate the masses. Orwell's Big Brother relied on
Newspeak to eliminate undesirable words, strip such words as remained of
unorthodox meanings and make independent, non-government-approved
thought altogether unnecessary. To give a single example, as
psychologist Erich Fromm illustrates in his afterword to 1984:
The word free still existed in Newspeak, but it could only
be used in such statements as “This dog is free from lice” or “This
field is free from weeds.” It could not be used in its old sense of
“politically free” or “intellectually free,” since political and
intellectual freedom no longer existed as concepts….
Where
we stand now is at the juncture of OldSpeak (where words have meanings,
and ideas can be dangerous) and Newspeak (where only that which is
"safe" and "accepted" by the majority is permitted). The power elite has
made their intentions clear: they will pursue and prosecute any and all
words, thoughts and expressions that challenge their authority.
This is the final link in the police state chain.
Having been reduced to a cowering citizenry,mute in the face of elected
officials who refuse to represent us, helpless in the face of police
brutality, powerless in the face of militarized tactics and technology
that treat us like enemy combatants on a battlefield, and naked in the
face of government surveillance that sees and hears all,we have nowhere
left to go. Our backs are to the walls. From this point on, we have
only two options: go down fighting, or capitulate and betray our loved
ones, our friends and our selves by insisting that, as a brainwashed
Winston Smith does at the end of Orwell's 1984, yes, 2+2 does equal 5.
Most Americans do not understand what the Federal Reserve ,or Fractional Reserve System,is or why it is at the heart of our economic problems. When Americans get into discussions about the economy, most of them still blame either the Democrats or the Republicans for inflation, for the housing crash, for our rampant unemployment and for the national debt and the reason why everything today cost so much more than it did 10-20 years ago. But the truth is that the institution with the most power over our economic system is the Federal Reserve.
It will be very plain to see,at the conclusion of this topic, that this control over the public and the cost of living should be stopped immediately. Not only to aid the workers making $7.50 an hour in an entry level job, but the people renting an apartment, buying a vehicle, buying groceries at a neighborhood store. All are affected by the antics of The Federal Reserve.
The Federal reserve is not an agency of the Federal Government. Never has been. Rather, they are a privately owned banking cartel that for whatever reason or another, was granted a perpetual monopoly over our banking system by the U.S. Congress. This privately-owned central bank has been destroying the value of the
U.S. dollar for decades, it has run our economy into the ground and it
has driven the U.S. government to the brink of bankruptcy. The Federal
Reserve operates in great secrecy, it has never been subjected to a
comprehensive audit and it is not accountable to the American people.
Yet the decisions that the Federal Reserve makes have a dramatic impact
on the lives of every single American citizen.
If you really want to understand what is causing our economic problems,
it is absolutely crucial that you understand exactly what the Federal
Reserve system is and how it is systematically destroying our economy.
Once you understand the truth about the Federal Reserve, you will view our
economic issues in this country a whole lot differently.
President Wilson signed The Federal Reserve Act on December 23,1913 to provide the nation with a more flexible,safer and more stable monetary financial system. Coincidentally,a permanent income tax was also passed that same year. The whole idea was to transfer wealth from our pocket to the government and then the government to the bankers.
This Act made the Federal Reserve Bank the central banking firm of the United States. We are not the only country with a central bank and we ,as Americans, were kind of late in the game. These banks are tasked with controlling interest rates, the money supply and overseeing the banking system. In a stranger way than most central
banks of the world. There are four tiers: ~ The Board of Governors, the Federal Open
Market Committee (FOMC), 12 regional banks, and smaller member banks. ~
~ We'll start from the top. The Board of Governors is responsible for
much of the monetary policy we'll describe later. These seven people are
nominated by the President, pass Senate approval, and sit in Washington
making decisions.
~ Next we have the FOMC, a committee of seven Board of Governors
members and five regional bank presidents. The FOMC runs open market
operations, which we'll also get to later.
~ Then there are the 12 regional banks, responsible for much of the
nitty gritty banking stuff (like check clearing). They are located in
Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago,
St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. Each
regional bank has a president and oversees the thousands of member banks
in its region.
So why do we even have a Federal Reserve System?
The U.S. didn't have a Federal Reserve bank for a long time. This meant
that the late 19th Century was basically a series of uncontrollable
economic panics. It wasn't until 1907, when the New York Stock Exchange
fell 50% and depositors "ran on the bank" to recoup their money, that
people warmed to the idea of a central bank and legislation passed.
So as a consequence to such an unstable market, the United States began to warm to the idea of a central banking system. Thus, hopefully stabilizing the economy.
The Federal Reserve Bank, as the lender of last resort, was supposed to
prevent such occurrences by providing temporary, penalty rate loans to
struggling banks. Note that there is nothing that a central bank could
provide that could not be provided by another private bank. In fact the
banking panic of 1907 was stemmed by private bank interventions led by
J. P. Morgan. However, Morgan realized that such private bailouts were
very risky and presented a case of moral hazard; i.e., that bankers,
confident of a bailout by the Morgan banking empire, might book
riskier, higher yielding loans. So rather than face the real cause of
banking crises and lobby to outlaw fractional reserve banking, the
Morgans, Rockefellers, etc.–who did not want to forego the financial
benefits of lending demand deposits–lobbied instead for government to
create a lender of last resort, a central bank, which we named the
Federal Reserve Bank.
Now we all know that when you deposit a check, the money doesn't just stay
in your bank's vault until you need to hit the ATM because this bar is
cash-only. No, banks move around and invest most of what they take in.
This is how banks make money, among other ways. There are, of course,
rules now about how much banks have to hold in "reserves," but the
problem before the Federal Reserve was this: What happens when all the
depositors want their cash back at once, a la the bank run scene in It's A Wonderful Life. As you'll recall, Jimmy Stewart's George Bailey tells the townspeople of Bedford Falls, "You're
thinking of this place all wrong. As if I had the money back in a safe.
The money's not here. Your money's in Joe's house... and in the Kennedy
house, and Mrs. Macklin's house, and a hundred others.
George Bailey was actually talking about fractional-reserve banking.
Today the Federal Reserve might say, "George, if all else fails, we can
step in and be the lender of last resort." The Fed kind of did say that in 2008, albeit not to George Bailey, but to nine highly-paid bank CEOs. Read more here :https://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008
Think of the Fed as a bank — but
just for other banks. The Fed lends money to banks, which determines
the rate which banks charge the rest of us for everything from car loans
to mortgages to credit card rates and pretty much every other loan you
can think of (and some fees only a banker can dream up.)
By
setting the rate banks can borrow from the Fed, non-ironically called
"the discount rate", the Fed helps determine whether rates are high or
low for the rest of us. And those rates help determine whether people
want to borrow money or not.
In
addition to the discount rate, there's the fed funds rate, which is the
rate you usually hear people talking about when it comes to the Fed.
The fed funds rate is the rate banks charge to other banks for overnight
loans, which is common practice in the world of high finance.
Technically, the Fed sets a 'target' fed funds rate.
Also the Fed uses "open market operations",
through which it buys and sells bonds in the open market. If you've read
news stories about the Fed buying Treasuries to help boost the economy,
that's an example of 'open market operations' in action and is an
example of "quantitative easing" or QE, which is not to be confused with
a ship.
When it buys bonds,
the money supply increases because the banks exchange their bonds for
cash and then have more money -- aka liquidity -- to lend to businesses
or individuals. The opposite occurs when the Fed sells bonds to the
banks, who typically can't refuse any offer from the Fed.
In
addition, the Fed controls the money supply by raising or lowering
"reserve requirements," which is the amount of money banks are required
to keep "on reserve" at the Fed, sort of like a rainy-day fund for the
banking system. Raise those requirements and banks have less money for
other stuff -- like lending; the opposite is true when the Fed lowers
reserve requirements...or keeps them low as has been its recent
practice.
Why does all this mean that I have to pay more for everything I buy with my money?
Well, the U.S. dollar has lost 96.2 percent of its value since 1900 Of course almost all of that decline has happened since the Federal Reserve was created in 1913.
Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.
Inflation is a “hidden tax” that continually robs us all of our
wealth. The Federal Reserve always says that it is “committed” to
controlling inflation, but that never seems to work out so well.
To put this into perspective, what used to cost 4 cents in 1900. Now cost's at least $1. So using this percentage of decrease in monetary value, if you go to the store one day and buy a loaf of bread for 25 cents, then go back the next day and that same loaf of bread that was 25 cents the day before is now $6.25. That's quite a jump in prices right? But you aren't being paid anymore money. You just have to purchase the bread at $6.25 today because your dollar today is not worth as much as yesterday due to a massive inflation hike from the Federal Reserve.
Now this is a dramatic example but it is not untrue. Interest has increased in small increments so everything over time, isn't this much of a dramatic change, but after a while you start saying things like " Things cost so much today compared to 20 years ago!" It affects everything that costs money to own because the money we hold is not worth as much 'today' as it was 'yesterday'. So with this example it is plain to see how living at $7.50 an hour would be very unmanageable,given that this money per hour is constantly being devalued and prices for everything keep rising.
The Fed’s mistake of slowing money growth at the onset of
the Great Depression is well-known. If anyone reading this does not know there is the link: http://fee.org/freeman/detail/the-great-depression-according-to-milton-friedman And from the mid-1960s through the
’70s, the Fed intervened with discretionary go-stop changes in money
growth that led to frequent recessions, high unemployment, low economic
growth, and high inflation.In contrast, through much of the 1980s
and ’90s and into the past decade the Fed ran a more predictable,
rules-based policy with a clear price-stability goal. This eventually
led to lower unemployment, lower interest rates, longer expansions, and
stronger economic growth.
Unfortunately the Fed has returned to
its discretionary, unpredictable ways, and the results are not good.
Starting in 2003 through 2005, it held interest rates too low for too long and
thereby encouraged excessive risk-taking and the housing boom. It then
overshot the needed increase in interest rates, which worsened the bust.
Now, with inflation and the economy picking up, the Fed is again
veering into “too low for too long” territory. Policy indicators suggest
the need for higher interest rates, while the Fed signals a zero rate
through 2014 and possibly beyond,as recently it was announced that interest once again would not be rising for the year 2015.
So if we close the Federal Reserve down today, what would happen?
Would it have any effect on our economy?
Would the cost of living instantly be reduced by default?
The answer to all these questions is variable and would take some time for restructuring of our system. But in all likelihood it would have an effect on our economy and the cost of living can be reduced. Many ideas have been set forth to make this happen and their results as well.
Including but not limited to......
~ Many advocates of ending the Fed argue for a return to the gold
standard, which President Nixon ended in 1971, due in part to growing
inflation, which was itself due to the costs of the Vietnam War.
Nixon was concerned that Fort Knox contained only one third of the gold
needed to back the dollars in foreign hands at that time. Under this
system, the dollar's value would once again be tied to the price of
gold. Another option is to tie the U.S. dollar's value to a basket of
commodities.
~ Tying the dollar's value to a commodity could very well moderate
inflation. If the country moved to a strict gold standard, for example,
the money supply would be bound to the supply of gold, so printing more
dollars would require acquiring more bullion to back them, a big
disincentive. This notion, of course, pleases proponents of controlled
government spending. Though there might be short-term bouts of inflation
and deflation, in the long run, prices could easily remain stable.
There are, of course, caveats. For example, massive borrowing could
spark inflation. And the country would also be forced to periodically
deal with the relatively unfamiliar territory of deflation. Returning to
the gold standard in particular could make these problems worse. "The
gold market can have very large movements within a day," says Randall
Kroszner, an economics professor at the Booth School of Business at the
University of Chicago and a former governor of the Federal Reserve
System. He adds that during recent times of economic uncertainty, this
added volatility would likely not have been helpful.
~ A change to the U.S. currency system could potentially be destabilizing
to foreign economies. Kroszner says that, as many countries tie their
currencies' values to the dollar, the potential deflationary effects of
being linked to a gold standard would lead to more exchange-rate
volatility. But advocates say the result would be more long-term
stability for the global economic system. "I think it would be extremely
positive, but the initial effect would be so bold as to be alarming,"
says Judy Shelton, a senior fellow at the Atlas Economic Research
Foundation, a nonprofit organization that advocates for free markets.
~ Most Keynesian economists believe that expansionary monetary policy
moves can boost economic growth. The U.S. has seen this at work most
notably with the latest round of quantitative easing, known as QE2. The
effectiveness of quantitative easing, especially balanced with
associated inflation risks, have been hotly debated in recent years. But
no more Fed would simply mean no more easing programs.
~ Shelton argues that the Fed, with its near-zero interest rates and
contributions toward dollar devaluation, "makes a sucker out of a
saver." "You save money, you've got zero interest for saving it, and by
the time you get it back out, it's worth less," she says. Without the
Fed pushing interest rates low in hopes of stimulating the economy, says
Shelton, saving money could be much more rewarding.
~ This is how Ron Paul put it in his 2009 book, End the Fed.
According to Paul and the Austrian school of economics, the booms,
bubbles, and busts of business cycles are the result of meddling by
central banks. But Shelton moderates this slightly, saying that the Fed
has worsened the cycle's negative effects: "Instead of smoothing out
that cycle, [the Fed has] tended to exacerbate it," generally providing
too much credit. Ultimately, she says, this can lead to irrational
exuberance. Whether or not this would be universally true, many
economists do blame former Federal Reserve Chairman Alan Greenspan's
policies for encouraging the housing bubble that sparked the economic
crisis.
~ The Fed does much more than determine the monetary base; its chief
functions also include supervising and regulating banks—arguably very
important functions, especially post-financial-crisis. Without the Fed
in place, a new entity would have to perform these functions. In
Shelton's opinion, this could be done either privately or federally.
~ The Fed has been around since 1913, so it seems difficult to envision
exactly how a Fed-free monetary system would look. According to
Kroszner, without a central bank, the U.S. might revert to the system in
place before the creation of the Fed: one of private clearinghouses
that would determine short-term liquidity, altering short-term interest
rates. However, Kroszner points out, longer-term rates are already
largely determined by supply and demand.
~ "Fairness" is, of course, subjective, but Fed critics argue that two of
the Federal Reserve's chief functions—selling bonds and regulating
banks—are at cross purposes and make for an unfair market. "If [the Fed]
goes into a community bank and says, 'We're very uncomfortable with
your loans to entrepreneurs...but we won't penalize you at all if you
buy U.S. Treasury bonds,' that's a huge conflict of interest. That makes
me uncomfortable, that the Fed has the inside track on the financial
resources of the country," says Shelton.
But I tend to agree with those who wish to End The Fed. This program has not been a successful partnership. For these 10 reasons listed here : http://www.freedomworks.org/content/top-10-reasons-end-federal-reserve I feel that any competent plan with solid backing of our dollar would be a step above what we have in this day. Unfortunately no concrete,solid plan exists today to replace the Fed that would actually be a definite benefit to our economy. No tried and true system that would enable a truly free market to operate on U.S. soil.
Raising the minimum wage is a terrible idea and will only result in goods and services costing more out of our already devalued dollar to the point of $15 an hour being the same as $7.50 today in this market. Not to mention the cutting of hours and loss of jobs due to companies, particularly small companies, not being able to pay for the substantial raise in cost. Obviously, the answer to this problem is not a minimum wage hike but to reign in the inflation and possibly reduce the inflation, that causes the $7.50 an hour job to be a tragically unlivable wage.
Recently, politicians have tried to pass legislation to Audit the Federal Reserve as a way to try to reign in the debt and spending caused by this system, but because of how this banking system was established, being 'above the law' so to speak, nothing has passed the voting stage.
Something needs to be done to reign in this outrageous spending and financing of debt that has a direct correlation on every Americans everyday lives in what we spend on everything from dog food to apples to toilet paper to automobiles. We,in this country, need to build a free market system that enables the citizens working not only at minimum wage,but also the people buying goods and renting apartments and so on, to make the cost of living ease up on the backs of our citizens. It can be done and I am hopeful that in the future we can do so.
In today's world we are inundated with regulations. Laws that tell private citizens or businessmen what they can or cannot do. We also have a very large amount of government agencies to enforce and ensure these regulations are being followed ... https://en.wikipedia.org/wiki/List_of_federal_agencies_in_the_United_States
Back in the year 1936 the Federal Register,which is the main source for regulations for U.S. Government agencies, was 2,600 pages long. That is a page count almost large enough to read the novel War and Peace, a truly enormous novel for those who are unfamiliar, twice, ( about 200 pages shy.)
Since the year that the register began in 1936 the amount of regulations has grown in unbelievable amounts. In just the year 2013 alone, The Obama Administration added 80,000 pages to the Federal Register.
Over the last 20 or so years our government has added at least 60,000 pages a year. A total amount since the year of 1993 is just shy of 1.43 million pages have been added to The Register. This averages out to 256 pages a day. Now this is not a count of laws or regulations as some regulations are more than one page but it is pretty close. If we try for a visual representation of how many pages that would be just since 1993, the stack of average everyday printer style paper would be 476 feet tall.That is the same height as the Virgin Hotel in NYC.
So why do we have so many regulations?
Are so many regulations for the good of society or is this an example of executive overreach?
Before I begin my anti-big government tirade, let's get an great overview from one of my favorite Libertarian journalists,John Stossel about what I will be discussing in this post....
Now,one has to assume that not all these regulations are truly necessary are they? What exactly has been added to the Federal Register since 1936 that affects our lives?
Let's take a look at some different areas of life and the new laws that have been put into place and views to see if these laws actually help the American people or if they hinder us from our rights and create frustrating barriers for small business entrepreneurs...
~ The above video is awesome for describing how regulation compliance affects every consumer and businessman across the board.~
America's founders fought the Revolutionary War to throw off British
tyranny. Most of the revolutionaries owned and used their own guns in
that war. After the war, in 1789, the 13 American States adopted the
Constitution, creating the federal government. Before ratifying the
Constitution, the people demanded a Bill of Rights to prevent our
government from depriving them of their liberties as the British had
done.
Today many in the public domain have a fear of firearms. We watch as the cries for gun control go up with every senseless tragedy that befalls our nation. But is this the guns fault? These hideous crimes that occur in schools or movie theaters or any other unguarded public place are being committed by psychologically damaged individuals, who I'm sure if they didn't have access to these guns would have used a bomb or any other kind of lethal device. This is what we see after each attack.....
As we have seen with prohibition, making something against the law does not make it disappear. When the government in 1920 decided to make alcohol illegal we would be gullible to think that this law forced people to stop drinking. Instead it forced drinkers into underground and created a black market for gangsters and 'dealers' to profit from.The same may be said for anything the government chooses to make illegal. After all, cocaine and heroin are illegal but does that mean no one can obtain them? (Check this link for more info on what and how people drank during prohibition.) http://www.efficientdrinker.com/blog/alcohol-sources-during-prohibition/
Would the same happen today if guns were seriously controlled? Background checks are nothing but a bureaucratic nightmare and truly are ineffective and don't in reality do much to remedy the issue, just provide more red tape...http://www.marketplace.org/topics/business/guns-and-dollars/background-check-what-it-really-takes-buy-gun Many consider a complete confiscation of firearms into the governments hands. This in itself very well could result in a total police state except for the criminals who don't ever obey the law.{For those who don't know what police state means and also the history of past gun confiscations in this country ,there is this link}...http://www.policestateusa.com/2014/large-scale-gun-confiscation/ One of the most important protections we have against government
tyranny is that we are presumed innocent of any crime until proven
guilty, before a jury, in a proper trial. So why then should law abiding citizens be asked to surrender their guns in the interest of public safety?
Gun control advocates would declare all gun owners guilty without
trial, simply for owning guns, even though millions of them have never
used their guns to harm another person. Such blanket condemnation is
immoral, unfair and contrary to the principles on which America was founded but yet we still hear the cries of gun control. That guns need to be taken away from criminals and no one is saying that they shouldn't be. To me the issue lies in why should guns be confiscated from law abiding citizens? Of which many will never have any occasion to use this firearm nor do they wish to, but this mode of protection is there for them to use if need be. There are also stories of how gun control was the cause of destroying people's lives.....
Along with stories of how gun control can truly turn law abiding citizens into criminals.
But as the Libertarian Harry Browne states...
So who is right?? What is the right answer when it comes to guns in this country? Should we all give up our guns? Would that make us safer or would that make us prey to the wolves?
I tend to err on the side of freedom whenever conflicting points of views are presented and this subject is no exception. We have many examples of how not limiting or controlling weapons results in safer communities and country as a whole. Switzerland has the largest amount of armed citizens per capita and the least amount of gun crimes on the face of the Earth..http://www.barefootsworld.net/switzrld.html Granted, Switzerland doesn't have the melting pot of immigrants that America has, with the huge cultural diversity but I don't think that changes the principle of gun ownership. Yes there is going to be evildoers, no matter what race,color,creed or sex and there always will be,but I do tend to believe that an armed populace is a safer populace.
Likewise I do believe that if our schools allowed guns to be carried by teachers or veterans or armed policeman on duty,that many of the children who sadly perished would still be alive today. If the psychologically damaged people who have committed these mass shootings could have been thwarted by a law abiding gun carrying citizen or trained professional,far less children would have died, in my opinion. For that matter, the attacker maybe would have thought twice about committing this heinous act, if in fact, there was a threat of deadly force before even one defenseless child was killed. And I'm not alone in that theory. Actor Vince Vaughn recently in an interview with GQ Magazine said just as much.That guns should be allowed in schools for our children's protection.
The very reason we have the Bill of Rights in this country,as stated at the beginning of this writing was to make sure that our government would not take our rights and property as the British had done. What is to stop our government from taking everything we own by force if we cannot defend ourselves? Just the very thought that possibly, a citizen may be armed halts a lot of would be evildoers before they even begin to do harm. Without that threat of bodily harm and protection using deadly force we become sheep, waiting for the slaughter, either from our own government or from someone who would do us harm. We are giving up our own safety when we give up our guns.http://www.wnd.com/2013/02/see-police-confiscate-guns-from-americans/
Millions of Americans have guns in their homes and sleep more
comfortably because of it. Studies show that where gun ownership is
illegal, residential burglaries are higher. A man with a gun in his
home is no threat to you if you aren't breaking into it. http://www.gunfacts.info/gun-control-myths/crime-and-guns/
The police do not provide security in your home, your business or
the street. As Harry Browne wisely stated,they show up most of the time,after the crime to take reports and do
detective work. Let me reiterate... After The Crime.The poorer the neighborhood, the riskier it is for
peaceful residents.
Only an armed citizenry can be present in sufficient numbers to
prevent or deter violent crime before it starts, or to reduce its
spread. Interviews with convicted felons indicate that fear of the
armed citizen significantly deters crime. A criminal is more likely to
be driven off from a particular crime by an armed victim than to be
convicted and imprisoned for it. Thus, widespread gun ownership will
make neighborhoods and potentially schools safer.
~ Guns are not violent by themselves, they won't suddenly come to life on their own and start shooting off their bullets, it is the intent of the user that is violent or hurtful. ~
This is undoubtedly true. You can't argue with this logic. If this was not true then we could blame the forks and spoons for allowing a person to eat too much and get fat. No inanimate object is the reason for any one persons behavior, nor does the responsibility fall on said inanimate object. These object are the tools of the user. Either for good or bad, the intention is of the user not the tool.
So why do we blame guns for everything they are by association, involved in?
Are we,as a whole, afraid of guns?
Does knowing that someone could use deadly force against us make us afraid?
If the answer to the last two questions was yes, then doesn't that answer also hold true for criminals? Just the thought of knowing that someone,let's say for the purpose of discussion a law abiding citizen,even possibly,has the ability to use deadly force against us. That potentially makes a criminal even the slightest bit afraid or more so,and may deter a crime before it starts.
So why do we blame guns? .............
Here is a great page on this issue from Debate.org that will help to put both perspectives on why do we,as a populace,blame guns,with both sides of the issue well represented....http://www.debate.org/opinions/do-guns-kill-people
So after all this, what truly is the answer? I do realize that there is much more to discuss and this is just a very general overview, but these specific issues I will save for a more gun issues detailed posting at a later date, as each separate issue here is a posting all on it's own.
~ But my personal view is this ~
Guns by themselves are not the issue. They are inanimate
objects. Gun control advocates talk as if guns could act on their own,
as if human beings cannot control them, so the uncontrollable guns must
be banished.
The responsibility should be placedwhere it belongs,in the person wielding the firearm.If he or she acts responsibly, without attacking others or causing
injury negligently, no crime or harm has been done. Leave them in peace.
But, if a person commits a crime with a gun, then impose the severest penalties
for the injuries done to the victim.Also, hold the negligent gun
user fully liable for all harm his negligence does to others.
Rather than banning guns, the politicians and the police should
encourage gun ownership, as well as education and training programs. A
responsible, well-armed and trained citizenry is the best protection
against domestic crime and the threat of foreign and or domestic invasion. America's
founders knew that.We would be wise to follow their wisdom.
This page is for the views and expressions of how liberty and freedom and small government,not big government control,can work to solve the problems of the world today. I will research topics that involve our everyday lives and post my views of how liberty can work to solve these topics and how we as a people would be better off with a minimal interference from government control.
