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A Voice from Fly-Over Country
August 8, 2011

“We Can Just Print Money”
by Robert L. Hale
fitzgerald griffin foundation

MINOT, NORTH DAKOTA — “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default,” said former Federal Reserve Chairman Alan Greenspan on Sunday, August 7, 2011. This is good to know. The question is whether Mr. Greenspan is pretending to be a comedian or took some kind of psychedelic drug prior to this comment?

If money could just be printed, it would be better than having it grow on trees. As a child, every time I wanted something that did not fit in the family budget, my parents gently reminded me, “Money doesn’t grow on trees.”

With trees, one has to provide care and nurturing. With a printing press, all one has to do is push a button. Mr. Greenspan clearly has no clue what money is. It is not just a piece of paper. It is what that paper is supposed to represent. Most people know that Greenspan was a friend and adherent of Ayn Rand. One of her admonishments was the evil of fiat currency.

Fiat currently is a currency with nothing to back its value. This is what the U.S. dollar has become ― nothing except the paper it is printed on. Long ago, the U.S. went off the gold standard; and in the early 1970, the nation went off the silver standard. Today, the only thing backing the value of the U.S. dollar is the federal government’s ability to loot the wealth and earnings of those who have worked to create tangible things of worth.

The problem facing the federal government is that fewer and fewer Americans are creating wealth. In fact, more and more Americans are choosing to do little or nothing and scheme to live off government redistribution of other people’s wealth.

The recent game played by Republicans and Democrats over the outrageous U.S. debt focused attention on the real issue. The issue according to the Democrats is the need to raise revenue (they fear to say “raise taxes”) and achieve “balance.” What they mean by “balance” is giving to Congress more of the earnings of those with money to spend. In short, those who have wealth must give more to the government to redistribute as it wishes.

While the Republicans pretend to oppose any “revenue enhancement,” they have said they are willing to “close loopholes.” What this means is those who actually earn money by creating wealth must pay more through the elimination of deductions currently in the tax code. In other words, their tax bite will increase.

Both Republicans and Democrats are as disconnected to reality as Greenspan, who believes that money can just be printed and all will be well. Democrats and Republicans believe there is no limit to what they can loot from those who earn money and create wealth.

The current unemployment level and decline in gross domestic product growth are not fiction. They are real and will not improve with the politicians who currently pass for the nation’s leadership in Washington, D.C. Nor will these indicators be reversed with the mindless policy recommendations of economists such as Mr. Greenspan. Both groups are taking America headlong over a cliff, a cliff sure to provide a very abrupt and painful landing.

Let’s pretend for a minute that Mr. Greenspan is right. Let’s pretend that any debt can be paid just by printing money as Greenspan believes. If this is the case, why doesn’t Congress just pass a law directing that enough money be printed to pay off our debt and provide a million dollars a year for everyone? Because everyone ― liberal and conservative alike ― knows such money would have as much value as the money in their Monopoly game box.

There is only one way out of the financial dilemma America faces ― stop this mindless spending binge and get government off the backs of those who create wealth.

Government does not create wealth, it never has, and it never will. Government regulations, when proper and mindful, can facilitate the private sector’s ability to produce wealth and the prosperity that goes with it. However, today government red tape takes as much or more out of the economy as taxes. This is why unemployment is high and will remain so, unless and until government stops its relentless interference with the private sector.

Not only is “too big to fail” a fairy tale; so is Mr. Greenspan’s belief that debt can be paid off with paper money. Those who believe in fairy tales should get in touch with the Fairy-Tales-in-Chief in Washington, D.C., and insist the presses start rolling to print our way out of debt. They should be sure to send a copy to Mr. Greenspan and his old colleagues at the Federal Reserve.

Oh, yes ― they should also send a note to China and tell them we will be shipping full payment just as soon as the ink is dry.

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A Voice from Fly-Over Country is copyright © 2011 by Robert L. Hale and the Fitzgerald Griffin Foundation. All rights reserved.

Robert L. Hale received his J.D. in law from Gonzaga University Law School in Spokane, Washington. He is founder and director of a non-profit public interest law firm. For more than three decades he has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.

See a complete biographical sketch.

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