Everybody who is involved with finance fears that the U.S. Economy is heading towards a recession. Some actually fear that the United States is heading towards, not a recession, but a depression. The scariest thing is that it could actually be worse than that of the1930s. Bold words, but America is headed for an economic hard fall that no-one is prepared for. With election 2008 coming in full force, the candidates try to address the biggest issues facing America. Immigration is the biggest issue on the Republican side and for the Independents. While immigration may help a depression occur sooner, it is not even close to the reason. Democrats on the other hand view health care as their most important issue. If a depression happens and nationalized health care was in place, the depression would just get worse and worse. The Government has caused this problem. Their attempts at healing it are nothing more than placing a small band aid on a huge gaping wound. The problem with placing a band aid and a gaping wound is that it helps the problem for a few weeks but actually makes the problem worse in the long run. Instead of foreseeing this the Government has let this wound get so big it is now infected and out of control.

Inflation is the only real cause to this downward spiral, and the Government is responsible. Our paper dollars are backed by nothing except our assurance that the United States of America is the greatest country in the world. Our dollar is really worth nothing but paper and ink. The U.S. Dollar has become almost meaningless on the world economy. For the first time in history the U.S. Dollar is worth less than the Canadian dollar. In November of this 2007 the Canadian Dollar was worth $1.09 U.S. If this is not the biggest indication of America’s economic problems, then what is? In 1962 the average cost per gallon was only 25 cents usd. In 2002 gasoline was an at an average of $1.40, still low by todays standards, but adjusted for inflation gas was actually cheaper in 2002 than in 1962.

Our national debt has already passed 9.1 trillion U.S. Dollars. Who do we actually owe that money to? We owe $3,991,754,006,234.96 to other countries, and we owe $5,180,516,146,138.48 to ourselves! When the Government needs more money they just seem to print as much as they want. They Government also just sells bonds to foreign countries whenever they feel like it. What will happen when China comes to collect it’s money?

The USD was backed by something of value at its creation and that lasted all the way until Franklin D. Roosevelt took the Country off of the gold standard. By printing money at will, he was able to bring the Country out of the depression. It is quite ironic when you think that that the Government printing this money will actually be what puts us into this depression. The only real way to fix the problem of inflation and put this economy back on track would to be in fact go back to the gold standard. Now will the Government ever do this? No, of course not. They will not just relinquish their power that they currently enjoy. Instead the Federal Government raises and lowers interest rates at will. This doesn’t actually solve the problem, it just creates a bigger one. Lowering and Raising the interest rate helps for just a short while. People are getting fed up with this game that the Government is playing, a game that really only takes power away from the people.

When our market, due to the mortgage crisis, is going sower the Government just keeps on cutting interest rates. It picks up the economy in the short run, but in the end it actually hurts the Country more. When the Federal Government cuts interest rates, they always seem to print more money so they can loan out money at those rates. That just creates more money than the market could bare. The best thing the Government could do would be to stop printing meaningless money. While it would hurt the Nation for a short term, in would strengthen it in the long term. This type of recession is the type where there is just too much money, so it would be best if the Government stayed out of it. Inflation reports just keep on getting worse and worse and are hurting our economy. The Government’s methods of fixing short term inflation create worse long term inflation.

The Government’s appetite for spending is ever increasing. The Government needs to either cut spending ferociously, or tell the tax payer the actual cost and raise taxes. Raising taxes is incredibly unpopular, and you do not seem to get anywhere politically by cutting wasteful spending. So instead, the Government just creates money out of thin air to help with their spending habits.

“Since the Fed stopped publishing M3, which tracks the total supply of dollars in the economy, we can’t even be sure how many dollars they are creating. Reported inflation is around 2%, but the method for calculating inflation changed in the 1980’s, largely at Mr. Greenspan’s urging. Private economists using the original method find actual inflation to be over 10%, which matches more closely the pain consumers in the real economy feel. The reality is that this type of manipulation of the markets masks where resources, or money, ultimately comes from. It comes from the taxpayer. The government doesn’t create Gross Domestic Product, they just limit and control how it is done. They then absorb much of the value produced in the economy through taxation and inflation, so they can squander our nation’s wealth with runaway spending. The Fed tries to keep up with government’s spending habits, but is sending inaccurate signals to mask bad monetary policy. Ultimately, we’ll get back on track financially only when government spending is held in check and the free market controls monetary policy, not the other way around.” Republican Congressman Ron Paul

The Government needs to let go of the control it has loved for so long. The economy, if it was able, would fix the problem itself. Inflation should not be our Nation’s biggest problem, but because it is so severe it is. The lower value of the dollar benefits exporters and the Government. But the weak dollar is severely hurting the average tax paying American.

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