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Eco-Nomics ››
Living Green, Affordably ››
Life of a Dollar
Life of a Dollar (continued - p2 of 3)
Money Creation and Inflation
When the Federal Reserve loans money to banks or the government, more money is created, thereby increasing the amount
of money in circulation. The more fiat money in circulation there is the less valuable every dollar is, so the more
money it takes to buy the same amount of goods and services. This form of money debasement is most commonly referred
to as inflation. The American dollar has lost about 96% of its value since 1913 due to inflation alone and indeed,
the national debt could not exist without the creation, existence and use of fiat money.
Congress has spent more than its income every year since 1969, resulting in much of the government debt we
have today. When the government spends more than it receives in taxes, it finances the deficit by borrowing more from the
public, whether by raising taxes, reducing spending (usually for public programs and services), selling securities (i.e.,
debt instruments such as Treasury bills, notes, debentures or bonds), borrowing more money from the Federal Reserve, or
via intra-governmental loans and transfers (taken directly from money that is supposedly set aside for public programs and
services). Interest is then charged in addition to that which government borrows, all of which becomes part of the national
debt. In all cases it is the People who pay, either directly through taxation or reduced access to public programs and
services, or indirectly due to inflation and other money debasement schemes. If the government loans money without value
to itself using the time and labor of its people to pay such debts (against their will), what does that make its people?
Spend Your Earnings Before Others Do It For You
Our government lives off the backs of the People, as more than 90% of its income is derived from taxes. Other government
revenue sources generally include such debt and money debasement schemes as the selling of government securities (i.e.,
loans at the People's expense), usury (i.e., the charging of interest on loans), inflation and market manipulations. Most
of us on the other hand earn a living, although many also spend up to 35% or more of their total income on federal
income taxes (and this doesn't include other federal taxes, state, county or city taxes), another 2.5-10% is lost to inflation
and other money debasement schemes, and up to 30-40% or more is spent on basic living expenses, leaving us with roughly 15-33% of
the income WE EARNED. If we don't learn to spend our earnings wisely, others will do it for us however they see fit,
whether we agree with how our earnings are spent or not.
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