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April 15, 2022 - Ron Paul Liberty Report
20:16
Like Covid: Will Government's Reaction To Inflation Make Everything Much Worse?

Government is not a problem solver, but a problem multiplier; the reaction to Covid being just the latest example. Government actions piled a host of new and devastating problems on top of Covid itself! We now have an inflation problem created by government spending and Fed counterfeiting. Will government's reaction to inflation create new problems on top? Yes.

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Time Text
Causes Of Inflation Worry 00:12:10
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Hello, Dr. Paul.
Good morning.
Great to be with you.
Very good.
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Chris, what do you have on the program today?
What are we going to be talking about?
Well, Dr. Paul, we are wondering: is the government going to make things worse like they did with COVID, where their reaction was much worse than the virus itself?
And that's usually the case.
Government reactions are always worse than the problem.
And the usual, the reason why is because money and power are involved with government, and there's never enough money or power for those people who desire such things.
So we saw with COVID, not only did we have COVID, but all of the government ways that they helped, they created depressions and suicides and alcoholism, drug overdoses, ruined businesses, ruined lives.
So government took the problem and then piled on all these new problems, you know, supposedly in their way of fighting COVID.
So we're wondering, you know, inflation right now is a big problem.
And I know myself, my wife and I were just going over our grocery bills yesterday and food prices are definitely higher.
So are we to expect now that government, in the name of fighting inflation, will give us new problems on top of inflation?
They're surely not going to fix it because government doesn't fix things, but they can surely make things worse.
And that's, you know, what we're wondering today.
You know, will government take the inflation problem and their reaction to it?
Will they make things much worse?
You know, the short answer should be enough.
And for a lot of our viewers, it is enough.
Will the government make things worse?
Of course, they will.
And that's what they do.
That's their job to keep them busy.
Bureaucrats have to have jobs.
So whether it's COVID or wars or whatever, everything they do tends to cause two more things.
Mises said in economics, that's the way it's worked.
If they write one regulation, you need two more to try to correct it.
I think he made a mistake.
I think it creates three more.
You know, everything that we do causes more trouble.
So, this is what we always pretend that we can do: we can work things out by spending more money.
Just think of the talk now from the progressive.
The most bizarre thing in the world about what are we going to do about the inflation?
Isn't it Putin's fault?
Isn't it Biden's fault?
Well, that's misleading.
It's great.
I don't think they need help from us to start blaming Biden for some problem.
And we're looking more for what ideas cause the problems.
And, of course, spending money is a cause of the problem.
They say, you mean spending money causes inflation?
Well, Nancy Pelosi says, no, spending money helps.
She wants to spend more money.
And I guess her theory is that people will go to work and cause and create a lot of profits and it will reduce inflation and it will balance the budget.
But that's the way they think.
And, you know, as bizarre as it may seem, I think she probably believes that.
I don't know for sure, but at least she has a lot of influence.
But this whole thing of spending money to solve the problems of spending too much money, this is always the case.
The government wants to do something because that's why they exist.
This is really the challenge we have, Chris, in trying to present our case for liberty: is that, yes, we want to do something, but what we want to do is enhance liberty, and that means that we have to challenge the runaway government.
And then we have to change some viewpoints too, because, you know, the natural tendency with the understanding of what's going on in the economy is that when people go to the stores right now, since we've basically everybody's had the same bad education economics, they go to the store and they say, prices are up, but I don't have enough money.
Oh, okay, I know my congressman.
I'll put some pressure on him to send us more money.
Just think how much money was created at the beginning of COVID.
That was going to be the solution.
Trillions of dollars.
And even in 2008, when that recession started, and really that QE that started is continuing.
But it's all just creation.
It used to be millions.
It used to be billions.
Now it's into the trillions of dollars they create.
Then they say, I wonder where the inflation comes from.
Well, what they have to get used to is they have to accept the fact that what we're facing is that we don't have a unit of account and we can't measure values.
And prices go up not because of some distant cause, which may be a contributing factor, but we must have them recognize that it's that the decrease in the value of the dollar that is the basic source of the inflation because people have accepted, especially the politicians, that the best way to tax people is fool them into believing that we'll just spend and give them money and we won't tell them that's how we tax the poor and that's how we tax the middle class.
At the same time, the distortions make the rich richer.
Sad state of affairs.
We have to continue our fight, Chris, on this battle.
That's right, Dr. Paul.
We'll do our best.
And you make the great point.
People will think, you know, I don't have enough money.
Well, the government will be like, okay, we'll give you more money.
And they have no money.
They're 30 trillion in debt.
So if they print money and give it to you, that will further drive up prices.
So they will make a problem that already exists much worse.
Another very common, this goes back thousands of years to the Roman times, to the ancient times, is people will want price controls and price controls.
This is an economic law that can never be beaten.
They always lead to shortages.
So, you know, but I guess people never learn or they don't know their history or they just feel like if government mandates that you can't sell above this price, that that's going to help them.
It will not.
It will lead to empty shelves.
And when there are empty shelves, then the temptation becomes rationing.
Oh, there are no eggs in the supermarket.
Well, we'll come up with some system where you can buy them on, you know, they can make up their own arbitrary system on who can buy them and when.
And what concerns me is what we just went through with COVID, where there's no laws.
There's just arbitrary mandates.
One day they just come out and say, you put this cloth on your face.
You have to.
Doesn't matter if it works, doesn't work.
You have to put it on your face.
Or they lock you in your house.
You stay in your house.
You can't go to work.
Or if you do go out, you have to stay six feet, not five feet or ten feet, but six feet away from other people.
All of this was done just arbitrarily by mandates.
And that worries me too with inflation.
What kind of mandates will they cook up to deal with inflation that they cause that will simply just make things worse?
Unless people start learning basic economics and we're doing our best to get the ideas out there, hopefully, you know, things will improve.
Very good.
You know, you're talking about what the government does to trick people into it and deceive them.
But, you know, the one trick that they use that the people don't realize because you can't fool the people all the time over everything because the markets get fooled at times.
But the one trick they use is what they call, you know, the term stagflation.
The economy slows down and the prices still go up.
What is it?
Why is it cause that?
And they say, we can't explain it.
Well, it's easily explained with Austrian economics.
But I'm thinking about the shrink inflation, making things smaller.
I think most people now who do grocery shopping know that, you know, there's not as much stuff in this box again.
The cereal boxes are smaller, the bread is smaller, and this sort of thing.
So it's a form of fraud as far as I'm concerned.
And, you know, I was thinking back, I don't know whether it exists.
Maybe someplace in the United States they still do it because I don't want to pick on bakers.
But you know, when I was a kid, we delivered milk to a bakery, and we always ended up buying a dozen doughnuts.
And I can remember going in, and I always thought it was neat.
Am I going to get a baker's dozen?
And that's 13.
You get a little bonus.
That's when things are going well, and they do this.
And now you don't have baker's donuts anymore.
What they do, it isn't shrink inflation, it's the expansion of the whole in the doughnut.
They expand the whole so there's less there and it's all deception.
So that's donut economy to talk about because that doesn't change anything if you don't hone in on the relative importance of spending and deficits and all.
People say, you know, conservatives say, well, spending too much money and that'll cause inflation.
It's all related, but you always have to go back to the deception of taxing people with the valuation of the currency and using this as a manipulation.
That's what you have to hone in on because, yes, the spending is the incentive, but back one step further is who wants the spending?
Well, right now, everybody does.
Do you think the military industrial complex are going to step forth?
You know what, folks?
Policy, War, and Economic Manipulation 00:08:04
This country is threatened more by inflation and depression and all these things.
So we're voluntarily saying, well, we don't need new weapons to build every single year.
Why don't we just find out a better foreign policy?
Maybe we wouldn't need some weapons.
Maybe we shouldn't be in the business of selling weapons and giving weapons away to maintain our empire.
There's all these things, but instead, the people go along and they say, oh, if you don't do this, if you don't support the lockdowns on COVID, and if you don't support war in Ukraine, you're unpatriotic.
And if you didn't support the wars against Saddam Hussein, you could be accused of being unpatriotic.
All those things.
People have to come in and hone in.
And to me, one of the most important things to hone in on with the inflation things is a definition of the unit of account, the definition of the dollar if it happens to be the reserve currency of the world.
Of course, that's not going to last because eventually that will end.
But definition of the currency or the money that is being used.
Because for a long time, it was all, you know, even under that terrible situation of the Bretton Woods, it was the dollar that became king.
But the dollar was defined as $35 to an ounce of gold.
There was a definition.
And that is what sort of held things in a little check.
But we knew it would break down, and that's what happened in 1971.
It broke down, the whole thing crashed.
We admitted there were bankruptcy that we printed too much money.
But if they ever want to really solve the problem, the basic instincts of the people many, many centuries ago decided that bartering was very clumsy, cows for horses and all that.
That's difficult.
But what they did learn is a substitute.
And the substitute that they picked was gold and silver for exchange among people.
And trade spurred on.
But it wasn't too long where the governments wanted to take over monopoly control of the money.
So the rules that we have to live by, or they at least write about, such as monopolies and things like that, and counterfeit money, the government should be held responsible.
Their fees should be held to the fire because they bring this about.
But right now, if we dwell on the individual symptoms, just high prices at the grocery store, you've got to figure out why are the prices high and whose fault is it?
And there's a lot of blame to go around.
But the basic thing is the nature of money and honesty in money is the condition that has to be studied thoroughly if we expect to ever improve our economy.
Excellent, Dr. Paul.
Money is the nucleus, and that's why we focus on it every week.
I'm going to make my closing statement now.
You know, during COVID, the whole world was presented with this idea of build back better all at once and all over the world.
It's very, very weird.
And if you look at those words, build back, I mean, build back what?
Nothing.
Viruses don't destroy economies.
But government policies do.
And government policies surely have, even to this day, messed everything up.
And everything, if you notice, with government, they destroy by helping, quote unquote, helping.
And that may seem very counterintuitive, but politics and tyranny are all about deception.
Whether you know it or not, you're in a big poker game with politicians.
And they're there to get you to want their help.
You know, whatever they have to say, whatever has to be presented to you, you need to agree to it.
And the entire downward spiral is people agreeing.
Yes, yes, print more money.
Yes, yes, invade that nation.
Yes, invade that nation and then that nation and make this policy.
It's a big yes spiral downward to wanting their help.
And that has to stop.
It has to stop.
We cannot rely on their help anymore because they will destroy everything.
This has happened so many times where you get to the point and they will build nothing back.
Destroyers know how to destroy.
They do not know how to build.
Because building is decentralized.
It is not planned.
Go on any of those discovery channels on how things are made, how things are manufactured.
It's absolutely amazing how things are made in the economy.
And it's all decentralized.
There is no central planning that could make it happen.
When you look around the world at where the central planning is, it's destroyed and nothing is ever built.
So that's the message.
We have to stop asking for their help.
We'll be just fine without it.
But unfortunately, people have to get to that point where they are ready to make that change.
Very good.
You know, the reaction to COVID and the reaction to war, in many ways, are similar.
They make the problems and they just go ahead and increase the size of government.
And when that is done, the assumption should be, and it should be a clear statement, that as soon as they do that, there will be a cost.
There will be a financial cost.
There will be a lot of things.
But the big cost, as far as I'm concerned, whether it's war during wartimes or economic crises, is the loss of liberty.
Because I am absolutely convinced that if we just had a hands-off position in foreign policy and economic policy, foreign policy, just come home, quit spending all that money.
If it's domestically, you know, the people who spent too much and they're in trouble, you can't use that as a justification to steal more from somebody else who have survived it all.
That won't solve the problem.
And the lockdowns have been horrible.
And the regulations that you get, the wage and price controls that come with war, they don't work, but they're very similar no matter what.
And right now, I think the biggest thing in the news, and it's filtered into this campaign, the election year, and that is the people are sick and tired of what happened with the lockdowns.
The parents have gotten annoyed with it, and they're starting to realize that there has been a lot of misinformation.
And that's hard to change people's minds.
But I think it is changing.
I think people will wake up eventually.
And I think I see that our responsibility here is try to wake people up and look for answers for this because I just don't think it's complex.
The people who support it want it to be complex.
That's why they give you eight different reasons why there's inflation and confuse the people and also why they give many, many explanations why we have to send kids off to war and the use of the draft to do it.
Have a decade like the 60s with Vietnam.
I mean, in my lifetime, I saw people I knew and relatives go off to war and not come back, both World War II, Korea, and Vietnam.
But the principles are like that.
Right now, there's people talking about, well, you know what, we better be prepared.
We're preparing, we're sending more weapons to Europe because it could be a war there.
We have to be prepared to fight China, so we better have a process.
If we need to draft, we better be ready to do it.
Destroy liberty completely, and they don't even blink an eye on what they're really doing.
So I think if we keep the eye on the ball, and that is keep your eye on the purpose of liberty and seek liberty and seek the truth, that we will all do much better.
I want to thank everybody for tuning in today to the Liberty Report.
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