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April 19, 2014

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letter to the editor:

Blame politics for income gap

The widening wealth gap, falling wages and low job creation are all serious issues affecting the middle and lower classes. People and politicians are fixated on things like the minimum wage and the living wage debates.

These issues seem to be intended to combat the erroneous belief that greedy corporations and the rich are taking an ever-larger piece of the economic pie.

The current debate over the minimum wage and more progressive tax policies are nothing more than political pandering for votes. Government always attacks the symptoms yet never the cause. This is because politicians are either unaware of, or ignore, the real cause. I would think the latter as it is what enables their profligate spending.

In 1971 this country went from a semi gold-backed currency to a purely fiat-based system where the Federal Reserve was free to print money without restraint. The insidious nature of monetary inflation has many adverse affects on our prosperity, and on a stable, growing economy.

Monetary and credit expansion tend to stagnate or push wages downward. They destroy the purchasing power of the dollar, making a livable wage increasingly difficult to earn. It has a re-distributive effect of enriching those at the top, and is the very initiator of the boom-bust business cycle.

The staggering, precipitous rise in the money supply since 2008 has virtually guaranteed another, more destructive downturn in the near future. Hopefully, by then more people will understand the real cause.

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