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

Read the first part of the series here

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