Does Federal Reserve monetization of debt essentially tax the private sector?
*Ron Paul Institute for Peace and Prosperity, by Ron Paul, February 6, 2017
”All federal spending, whether financed by taxes or by debt, forcibly is in essence a form of taxation. Therefore, cutting income and other taxes without cutting spending merely replaces one type of taxation with another. Instead of directly paying for big government via income taxes, deficit spending means citizens will be hit with an increase in the inflation tax. This tax, imposed on the people with the Federal Reserve’s monetization of debt, is the worst form of tax because it is removes resources from the private sector. Thus, all government spending both hidden and regressive.
Unfortunately, while Congress may make some small cuts in domestic spending, those cuts will be dwarfed by spending increases on infrastructure Keynesianism at home and military Keynesianism abroad. As long as Congress refuses to make serious reductions in spending, the American people will be subject to the tyranny of the IRS and the Federal Reserve.
The suffering will only get worse when concerns over government debt cause the dollar to lose its status as the world reserve currency. This will lead to a dollar crisis and a major economic meltdown.”
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