Robbing the Poor and Giving it to the Rich
I originally posted the following to Facebook on May 5, 2020 (in reaction to government stimulus early during the pandemic):
Republicans often argue for lower taxes for everyone; Democrats often argue to tax the rich more and the poor less. One thing that nobody mentions but nearly everyone could easily get behind would be that at least we shouldn’t take money from the poor and working classes and give it to the rich and mega corporations. It seems like an obvious position that would please everyone, yet it’s not discussed because everyone believes it couldn’t possibly be happening. Yet, it is happening every day.
Do you know what the Federal Reserve is? Hint: it’s not part of the government. Take a quick look at any dollar bill in your wallet and you’ll find that it reads, “Federal Reserve Note.” That dollar was created when the Federal Reserve, a private company with anonymous shareholders, purchased a U.S. Treasury Bond (government debt). The only reason any base dollar exists is because a treasury bond was purchased. There’s more debt than dollars, so if the government were to try and pay off it’s debt, it’d run out of dollars; it’s impossible to pay off.
In this current crisis, the U.S. Treasury teamed up with the Federal Reserve to issue the largest stimulus in history. The vast majority of it went to large banks and corporations. For every American that got a $1,200 stimulus check, $50k+ was added to the national debt in their name. The remaining of your $48.8k+ debt went to the Citi Banks and Boeings of the corporate world. On top of this, for every new dollar printed, previously existing dollars become a bit less valuable (in principle, hasn’t yet happened), which is another way to steal from lower classes that hold or save dollars.
It’s a terrible injustice that workers and future generations have been robbed like this. It’s an issue that Republicans, Democrats, and Independents should be angrily united behind. But nope, cable news networks instead have them focused on some dumb trivial thing that Trump or AOC said, completely ignorant of being robbed.
Want to change things? Start with educating yourself on these topics: the Federal Reserve, fractional reserve banking, inflation, bailouts
December 2022 retrospect
We’re currently in the midst of high inflation — with the possibility that it’s peaked. The Federal Reserve has now been aggressively increasing interest rates to combat it.
Two additional stimulus checks went out to Americans in the year after this post (first of which initiated by Trump and another by Biden shortly after he took office). The current inflation is directly a result of these stimulus measures along with other new government spending. Biden’s infrastructure bill will also probably add some perpetual inflation to the dollar over the next few years — but it’s possible this recession (if it’s ongoing) could counteract the effects of that.
The effect on average households has been devastating. Renters in some areas have seen rent double. The cost of food and household goods has gone up. Household savings rates have now fallen far below pre-pandemic levels, while their credit debt is skyrocketing — this is unsustainable. While the housing market boomed during the pandemic, it’s now cooled and prices are dropping (even rentals a bit).
When I wrote this post, I expected inflation to hit much faster than it did. It did hit extremely fast in the housing and used car markets, but it took a while to hit consumable goods markets. The question is, did it truly peak? What if the economy now spins into a deflationary spiral?
