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Jan. 11, 2024 - Ron Paul Liberty Report
24:09
Inflation To Get Much Worse! Courtesy Of The "Inflation Reduction Act"

If you ever want to peer into the future, look at the names of the bills passed by Congress, and then assume the opposite results for their intended goals. The "Inflation Reduction Act" will be yet another example. You can expect much more inflation if such an act is ever implemented.

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Time Text
Trillions and Inflation 00:14:44
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, welcome to the program.
Great to be with you again, Dr. Paul.
Yes, and it looks like it's a good day because our president's getting better.
He's working.
Yeah, he says he's in the White House.
Yesterday he took care of the recessions.
No more recessions.
We can't define it, so you don't have it.
So we don't have to worry about a recession.
And today we have something new coming up, and he's worked it out where some of those Democrats were arguing among themselves on exactly how much taxes they should raise at a time and what they should do.
And that was the big argument with Biden and Manchin on the Inflation Reduction Act.
Well, you know, that's wonderful.
So we need to reduce the inflation.
They didn't claim they'd solve it as quickly as they did the recession.
That was just a swipe of the hand.
But they're going to reduce it.
But Chris, you haven't been watching politics as long as I've had.
But you're a good student, and you are already very astute to not believing everything you hear from the government.
Matter of fact, I've recognized that you don't believe a heck of a lot of what the government tells us.
What about when they come up these bills?
Because I think you even knew the lecture I always gave a new employee that came to my congressional office.
I said, you guys have to help me out and make sure I know what's in these bills and tip me off.
So you know our rule, we're going to obey the Constitution.
And I said, but your job is easy.
All you have to do is read the title.
And you'll say, oh, yeah, like Inflation Reduction Act.
That sounds good.
No, no, that's not the way you do it.
It's the opposite of everything they say in the title and everything they say in their speeches, you know, and on and on.
So we live in an age when truth is exempt from sticking its nose into the business of government.
And so we're going to talk a little bit today because all of a sudden, Manchin, who's an independent, I don't know where he's going to come down on most things, but at this point he switched, he was holding this bill up, the big tax bill here.
So he held the bill up, but all of a sudden he switched and he got together with Schumer, and they're pleasing the president, even though some people are unhappy because it's not enough.
Just a little addition to what they've been doing into the many, many trillions.
Some of them are unhappy.
They say, you're not even a trillion dollars?
Just $700 billion as a sexted package?
No, we'll have to wait.
We'll get up to the trillion before this thing is finished.
By the time it gets through the Senate and the House, it'll be a trillion dollars.
And so this is a game we play, they explain, so we just have to go along with it.
But the 30, there's $369 billion dealing with the tax program, tax laws, and collecting more revenue.
You know, like giving money to the enforcers, you know, the gun people at the IRS, the people who collect the money, you know, like the old days, how the people came knocking on the doors, you will pay.
And so they figure always, they do this all the time.
They say we're going to have more audits and collect more revenues.
We've got to get the government's money.
It's not the people's money.
They're not stealing.
We've got to get the money because that's the government's money.
So The bill they just passed, you know, and to talk about no more recessions and they changed the definition in the stock market.
The markets loved it.
I don't believe the people in the stock market really believe it, but they believe there will be enough people doing it that the markets are going to move in that direction, and maybe in a week from now they'll do the same thing in the opposite direction.
But it's just something that they do and they pretend because they have to do it.
But the neat thing that's happening is the propaganda and the fibbing and the lying, giving all these numbers out, they're less effective on the average person.
I think COVID has done us a great service because the people, a lot of people, have awakened and they look at this and say this is a bunch of nonsense and they're already worried about the next epidemic.
But they don't worry about the money.
It's always some excuse for this.
And the one thing about this whole mess that we're listening to now and what we listen to constantly is inflation is a big deal.
And they call inflation prices going up too fast.
They think they need more money to pay the bills and that would solve the problem.
But the one thing that is very, very rarely mentioned is how this flation comes about, even though you could probably, and we've done it, I think, on this program, Chris.
We could sit down and name the suspect.
Who caused the flavor?
Oh, it was Putin that did all this.
He's at fault.
He's the one that messed things up because he put sanctions on the oil equipment.
He won't expose his oil, which is exactly the opposite of the truth.
So it's something they do and they know about it and they talk about it, but they do not talk about where the real source is.
When the government spends money and they run up debt in the last years, with COVID and the war going on in Ukraine, tremendous deficit.
The debt from 08 up until this year has gone up triple from $10 to $30 trillion.
And it's all put in there.
They say, well, the GDP looks pretty good.
Of course, they take debt, measure that, and say, oh, that's GDP.
The Democrat or the politicians spent the money and they bought tanks and that's in their agenda.
Oh, our agenda is up.
Our revenues are up.
So the GDP must be up because we spent this money in the industrial complex.
So this is the way they operate until the markets, even though a lot of people catch on and that is very good.
But ultimately, the invisible hand of the market knows when it's way out of whack and you just can't do it.
And not doing something about it is worse than doing something about it, but doing something about it is worse than not doing anything.
So they're in a bind and that's what they're doing.
That's why they're fussing as if this bill or changing the definition of a recession, that's not going to do it because they still won't talk about a very, very simple matter.
And that is, what is the unit of account that we do all this measuring?
What is that unit?
What is the monetary unit?
Oh, well, we don't have one.
We don't have one.
We pretend it's the Federal Reserve note, but nobody has ever seen value in a notice, a piece of paper or a fiction on a computer.
So they do this and they think it's going to solve this problem, but the market's in charge.
That's how the Bretton Woods broke down and said, you can't pretend that the dollar is worth $35 out of an ounce because they had printed too much.
We've been doing this.
We've been getting by without a lot of price inflation in the consumer realm, even though the statistics were unreliable.
It was only recently that the people, the shoppers, the people who had to buy groceries, buy gasoline, have recognized, uh-oh, there's big trouble out there.
So we'll ask Mr. President about this.
Is this serious?
Oh, it doesn't even exist.
Go away from me.
Don't bother me.
I'm sick.
You know, there's no problem.
So they send it back.
But, Chris, I think I know what side you come down on, and I think you sense there's a problem out there.
That's right, Dr. Paul.
And, you know, much like those people who are unfortunate to live in the Soviet Union, you know, it's easy to find out the truth when everything that the government says is a lie.
So, you know, I was out yesterday and I was just checking my phone.
I see Inflation Reduction Act.
And the first thought in my mind is, oh, geez, they're going to make inflation even worse.
And I didn't have time to look into it at the time.
And when I got home, then I did look into it.
And of course, they're going to make inflation worse.
$700 plus billion dollars in government spending.
I mean, that is the problem that we're facing.
You know, we had all these trillions and trillions of dollars printed up by the Fed that the government spent that it did not have.
And now we have all this money sloshing around chasing fewer goods.
And we have fewer goods because they did those useless and harmful lockdowns, which shouldn't have never been done.
So you have all this money chasing fewer goods, but then they're going to make it even worse than that.
They want to raise taxes on corporations.
Now think about this.
If you have fewer goods, you need more goods.
Well, how do you have more goods?
You have to expand your production.
Well, how do you expand your production with your profits?
You need your profits to expand and to create more, to bring down inflation.
Government's going to steal that away and go and waste it on themselves.
So it's all inflationary what they're doing.
Of course, they're going to make it worse.
All you have to do is look at the name of the bill.
And it's really a sad joke, but we have to live through it.
Very good.
And since they don't talk about the details of the money supply, and they have a difficulty defining, you know, what a dollar is and what the unit of account is and difficulty reporting honest statistics on CPI or whatever.
If they get tired of reporting some things like right now, technically they don't report M2, but you could still keep tabs on it.
They used to have a monetary number called M3, which was more inclusive, and they don't report on that anymore.
They say that that is not necessary.
But I did mention that our national debt is going up.
And that gives you a hint about what's happening.
And from 2008 until now, it went from 10 up to $30 trillion, a significant increase and a big deal.
But well, that's not an increase in money supply, is it?
Oh, well, let's look and see what happened on the money supply.
In 2008, M2 was $7.5 trillion.
A heck of a lot because that was in recent years that it was created.
But, you know, with the recession of 08, the QE operations, the seriousness of that inflation, which was already started before COVID, and we had COVID, and the busybody still didn't have enough actions, and they thought, well, this is a good time to get the military budgets built up.
And we do know that we spend a significant amount on military.
And a lot of people in Washington are worried about this.
The Hawks are worried, Democrats and Republicans alike.
And they say, well, the Russians are coming, and they're building up and they're saving money and they're making profits.
The Chinese are our enemy, and we have to do this and that.
But if you take the top nine countries, the largest countries in the world, and you add up what they spend on their military, we still spend more.
And yet they are still able to use this to intimidate the American public to think that if you vote against one penny.
Matter of fact, Rand had a bill in there, and he couldn't get people to vote against one penny on each budget, and nobody would vote for that.
So you can't get them to vote again, one penny down.
So they get it, and they vote for this, and they continue it.
And that, of course, is increasing the money supply.
And they say, well, but we have not had inflation.
We have not had the CPI going up as fast as other times because the CPI comes about with a little bit of market forces involved and productivity has something to do with it.
But nevertheless, if you inject artificially fiat money to the tune of trillions of dollars in these last decade or so, it was like $14, $15 trillion.
It will have an effect.
Not immediately and not always universally, but somebody said, well, what's wrong with that, Ron?
They increase the money supply, your value goes down, your prices go up, and everybody is happy, except for the fact that the money doesn't ever get distributed like that.
The wealthy have first access to it, so they spend it when it still has a greater value.
And they have access to it.
And the people in the middle class and down the line, you know, they get to spend it when the prices are starting up.
And then when they do, then more prices keep going up.
And the one thing I remember so clearly reading Human Action was Mises made the point that if you embark on a system that we're talking about and continue to talk about is you'll wipe out the middle class.
And I would say the middle class right now is not very happy.
You know, they say, well, we were not too long ago.
Interest mortgage rates were very low.
Everybody could have a house.
Well, right now they can't even pay the mortgage without paying much interest on there.
So they get to do this.
And yet the cost, all of a sudden that changes.
There's a slump because of the overbuilding.
So the middle class starts losing their houses.
Now you see in people homeless, and I saw churches trying to help the homeless by offering them about a thousand square foot box house, not much bigger than a dog house.
So this is the tragedy of this.
It was predictable.
They know about it.
And the real sad part is we know what causes the mess and we know what to do about it.
But nobody's quite ready for that to take care of it.
That's right, Dr. Paul.
The Cost of Empire 00:07:12
And, you know, liberty and prosperity, the amount of it is the inverse to the size of government and the amount of tyranny that they impose and the poverty that results from it.
Well, we started out as the freest country in the history of the world.
And amazingly, in just a few hundred years, we now have the biggest government in the history of the world.
I mean, what a story and what a swing in the wrong direction.
It's unbelievable.
You know, and we focus a lot on the problems.
You know, if you have the biggest government in the history of the world, you know where to go to point out where the problems are.
But we want to also be fair and provide solutions.
You know, we can't just point out problems.
But the solutions, people at this stage, and the ideas that people believe, they do not want to hear it at all.
Neither do politicians themselves and many people.
But the only way, if you want to reduce inflation, is to do the exact opposite of what they're doing.
Government spending must be cut drastically and not cut like, oh, we're spending more, but a lesser, a smaller percentage than last year.
No, it must be cut to the point where the politicians are sick to their stomachs.
That's how much it has to be cut.
And taxes need to be reduced drastically so that all the creativity that is just pent up and ground into the ground right now can come out and increase the production that we need.
That would drive down prices.
And the Fed, you know, stop printing money.
But there is no appetite for this, not in Washington, not for the people who depend on Washington.
So it's very easy to see what's going to happen.
Things are going to get much, much worse economically.
You know, and the best way I can understand it personally, but I think it's a good analogy.
It operates like an addiction.
It's a collective thing because everybody's addicted to easy money and low interest rates, believing that's the source of great wealth.
Well, it turns out it's the source of great tragedy and sadness and bankruptcies and loss of liberty.
But usually when it's discovered, it's a little bit too late and it's very, very difficult.
But it's so tempting to accept the free lunch.
But right now, the discovery is there that something is wrong and the country is going to get a lot poorer.
And we're involved in the welfare state, the corporate state.
We're involved in these wars that are going on.
We have an empire we can't afford.
And it's going to end.
So I wish more people would be prepared.
They should be prepared personally.
They should be prepared psychologically and intellectually and get as many other people to join in because it's not going to be easy sailing.
It's going to be rough for a lot of people.
But the answers are not complex.
If a person understands what liberty is all about, they say, oh, yes, but that is too complex with a world like this.
I said, yeah, but you can adapt rather quickly.
What if I could wave a wand and say, guess what?
We have we have a free society.
There's no income tax.
There's no inflation because we'll have sound money.
We have no bureaucrats in Washington because they have no constitutional authority and they don't certainly don't have the brains to tell people how to live.
I would think that would be a pretty neat place to live and your contracts would be honored and there would not be this class warfare going on and the struggle over political power because all of a sudden political power becomes so valuable that that is a whole process and then we get into all this undermining of our justice system.
That, of course, right now is one of our major tragedies going on because can you believe what the government's going to tell us?
So we say, oh, all right, things are going to be okay because the Department of Justice, the FBI, whatever we need will be on the side of justice.
It doesn't work out quite that way.
But one thing they did in this bill I think is important to mention, and that is they're writing into it a guaranteed worldwide tax, 15% on a tax on corporations, the large corporations.
That's the minimum tax, which really doesn't sound too bad because they're making a billion and billions of dollars.
So it's an easy target.
But for some reason, those kind of things backfire.
And sometimes, you know, some countries don't pay and other ones get stuck with it.
They have to pay for it, other countries have to pay for it.
But it's 15%, but it's a global tax, and it's a global agreement for this.
And that it's the way it's coming about that is so bad.
But once again, if we had that society that I dream of, where we're an independent nation, and people in the country are independent-minded, and they get to keep what they earn, we wouldn't be dealing with the details of the global tax, the UN tax, the IMF tax.
But the most vicious tax of all is the tax where they just print the money.
They raise tax and revenues to pretend they're like a business and they collect revenues, but it isn't.
The real payment comes from the devaluation of the currency.
Even back in World War II, they had us, I remember, saving stamps and putting them in a book and getting a bond all for the war effort.
It was only a very, very small fraction of the war.
It was paid that way.
It was paid for by printing money.
It was a devaluation.
So it's a tool that's used to expand government when they have to.
It's part of the secrecy of government.
And then when you talk about increasing the money supply, it's done in secrecy too.
And I have always argued that if we knew more about the Federal Reserve, more people would say let's get rid of the Federal Reserve.
But even though we've made some progress in that, you know, it is not audited.
But what's a big deal, they say?
We don't audit the Pentagon and we don't audit the CIA.
That'd be pretty neat to find out exactly what they're doing.
But the market is going to handle this.
This eventually will implode.
And therefore, all the malinvestment and all the mischief will be totally removed from it, but there'll have to be something set up.
Now, in the process, because there will be fighting and clawing away at what's left, we have a big political crisis that's going to erupt, and we've seen it on our streets already.
So that is a major problem that we have to deal with.
And if we don't do something about that and restore order, of course, that's a lot worse.
Chaos and Purpose 00:02:12
But the goal should be to seek the purpose of a free society where individuals are the important thing.
An individual is not important because they belong to a group and they inherit rights because I'm a member of this group and do such and such.
But that is not it.
Your rights come in a natural way and they're individual.
They're not collective.
And we had a taste of that in this country.
The founders understood it.
And therefore, that is where the answer is to be found because this system is not going to continue.
But I do want to thank everybody that tunes in and listens to our program and are enthusiastic about trying to shrink the size of government.
And I can understand why people get a little frustrated because how can we ever overcome this monster?
Well, especially it's difficult because the purpose of our enemy, which are the cultural Marxists, is to cause chaos in the streets.
So some of the dumbest things that they come about, why in the world would they do these kind of social warfare that they said?
And that's exactly what they want.
People say, why are they doing this?
And then get the arguments going and get chaos.
You know, defund the police, for instance.
Yeah, that's brilliant, especially when there's a lot of crime in the street.
But, no, the chaos is there, and the breakdown is there.
And the Marxists believe that is necessary.
It's proper because that's how they rebuild a truly Marxist society that will last a lot longer than the last one they tried.
So this should be seen also as an opportunity for us to get into debate of what is it going to be replaced with.
And we should have the advantage there because I think the understanding and the benefits of liberty so far exceed the authoritarianism of all these dictator states that I don't know why we ever lose the debate.
I want to thank everybody for tuning in today to the Liberty Report.
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