Think about this abuse of power. The government controls inflation, while at the same time has power over taxes like capital gains. For example, you buy an asset, and it never appreciates in intrinsic value or in value adjusted for inflation. Then you sell the asset for more dollars than you bought it for, but the increase is only from inflation. Then you get charged capital gains tax BECAUSE of inflation.
The government exercises power by spending money. If money is a representation of work, then the rate at which the money is spent is the power of money. The gold standard used to be one of the checks and balances to prevent the government from abusing power.
But somehow, the American public allowed the politicians to abolish the gold standard. Now we are starting to see the awful consequences of that action. Abolishing the gold standard was actually a power grab.
Original version posted July 1, 2009.
Modified August 21, 2014.
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