Tuesday, November 29, 2005

Ron Paul on Helicopter Ben

Mr. Bernanke appears to have embraced the idea that the Federal Reserve can create prosperity more than Mr. Greenspan ever did. Like his predecessor, Mr. Bernanke views our system of fiat currency as a tool for creating wealth out of thin air by producing more dollars, whether paper or electronic.

"The U.S. government has a technology, called a printing press, that allows it to produce as many dollars as it wishes at essentially no cost." - Helicopter Ben

It boggles my mind that someone as smart as Bernanke still thinks you can get something for nothing. Seriously, if they Fed could create prosperity, don't you think they would have done it by now?

The fundamental question is whether a central bank can manage the supply of money and credit better than the free market otherwise would. We shouldn't kid ourselves about the true nature of the Fed, which is inherently incompatible with real free market capitalism. Centralized planning of the money supply is a form of economic control that significantly affects prices, wages, and production levels. Remember how market economists once criticized central planning of prices, wages, and production levels in the former Soviet Union?


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