Phil for Humanity Phil for Humanity
A Guide for the Survival of Humankind and Helping the World, Society, and Yourself.

Audit the Fed

I have never understood the reason why the government borrows money from itself with interest when it can just print money.

I know when the government prints more money, thus increasing the amount of money in circulation, inflation will undoubtedly and eventually increase too. As a result of this inflation, the amount of money the government owes to itself and other countries actually decreases in actual value. This situation is a win-win situation for the government, since it creates money out of thin air that the government thought it needed while at the same time reducing itsí long term debt obligations.

Now borrowing money from yourself and promising yourself interest on what you borrowed does not even make any sense. Assume for the moment that you have enough money to purchase an expensive item, such as a brand new car, would you pay off the car in itsí entirety or do you borrow money from yourself to buy the car? You would just pay for the car.

Now the government has the same dilemma. Do they raise taxes to pay for the increase in money that they think they need, print more money that they think they need, or borrow the money from themselves? Typically, governments borrow internal money from one federal institution to pay for another federal institution. For instance, for decades, the Social Securities Administration collected (notice this is past tense) more money in Social Securities taxes than it was paying out, so some other federal organizations used/borrowed money from the Social Securities Program to pay for their programs while promising to payback the money with interest. Of course, these other government agencies never planned to pay back this borrowed money, and the entire government is now response for these debts.

This is proof that the government can not be trusted with balancing the budget or paying off itsí debts. And this is another reason why the Federal Reserve, also known as the Fed, that regulates monetary policy needs to be audited. Since the Fed was founded, it has never been audited. So, audit the Fed and demand fiscal responsibility from your politicians.

by Phil for Humanity
on 11/17/2010

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