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A government big enough to give you everything you want, is strong enough to take everything you have! - Thomas Jefferson

Saturday, July 19, 2008

To Fight Inflation, Curb Economic Micro-Management and Bail-Outs by Government, Says Bob Barr

“Americans thought they slew the dragon of inflation years ago, but it seems to be back, with the biggest monthly increase in the consumer price index in 26 years,” observes Bob Barr, the Libertarian Party candidate for president. The CPI hike was led by rising energy and food prices. “Inflation is an insidious tax on economic productivity and prosperity, as we learned nearly 30 years ago in the midst of Carter-era stagflation.”

Not only was the June increase in the CPI a recent record, but “wholesale inflation over the last year ending in June jumped 9.2 percent, the biggest increase since 1981,” explains Barr. Federal Reserve Chairman Ben Bernanke admitted that inflation was likely to be “temporarily higher” in the coming months.

“Unfortunately, the government bears much of the blame, since the Federal Reserve’s continued cuts in interest rates and increases in the money supply have naturally inflated the general price level,” says Barr. “In its desperate attempt to bail out the housing industry and spur business investment, the Federal Reserve appears to have infected the entire economy with the inflation virus.”

“Federal Reserve policy has reached a dead end, since the Fed can ill afford to continue pressing interest rates lower, further stoking the fires of inflation and undercutting the value of the dollar. Yet the housing market remains depressed and the long-feared recession may finally arrive on our economic doorstep,” notes Barr.

“There is no painless way to avoid market adjustments to past mistakes. But we should learn the obvious lesson that there is no free lunch—government cannot magically grow the economy and create jobs. Instead, manipulating the interest rate and money supply has resulted in significant costs for all Americans,” explains Barr. “Turning the Treasury Department and Federal Reserve into bail-out agencies of last resort for everyone from Bear Stearns on Wall Street to the housing industry, along with Fannie Mae and Freddie Mac, compounds the problem.”

“It is very important to maintain price stability,” Mr. Bernanke told Congress recently. “So it is,” says Barr. “But the only way to do that is to end the government’s attempt to micro-manage the economy, while protecting companies and industries from the consequences of their mistakes. If we don’t change current policy—really change it—resurgent inflation will be just one of many economic charges that we will all have to pay.”

Barr represented the 7th District of Georgia in the U. S. House of Representatives from 1995 to 2003, where he served as a senior member of the Judiciary Committee, as Vice-Chairman of the Government Reform Committee, and as a member of the Committee on Financial Services. Prior to his congressional career, Barr was appointed by President Reagan to serve as the United States Attorney for the Northern District of Georgia, and also served as an official with the CIA.

Since leaving Congress, Barr has been practicing law and has teamed up with groups ranging from the American Civil Liberties Union to the American Conservative Union to actively advocate every American citizen’s right to privacy and other civil liberties guaranteed in the Bill of Rights. Along with this, Bob is committed to helping elect leaders who will strive for smaller government, lower taxes and abundant individual freedom.

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