To the Editor:

Watch Out! The bureaucrats/politicians in The Federal Reserve have purchased new blowpipes and are ready to send another big bubble in your direction. It seems that every new crisis (is it really?) brings another opportunity to meddle with the free enterprise system. We have had one social liberal after another attacking this system and now we find ourselves in a situation that defies analysis. The consequences of all this is an economy that has been bleeding businesses, factories, jobs, and wealth at an astounding rate. The only thing that has been holding us together is “old money” because an insufficient amount of new wealth has not been created.

Now, we have an agency of the government (The Federal Reserve), that is not responsible to any elected official, proclaiming 0 percent interest rates for two years. What a dangerous and silly idea. Interest rates are not set by some quasi-government bureaucrat, who won’t account for two trillion dollars, they are set by the worldwide free market. This move by the Fed is akin to the five year plans of the Soviets. Remember how those worked out? Any attempt to thwart market forces is futile (remember wage and price controls under Nixon?). Of course 0 percent APR will entice many people to purchase something they can’t afford which will ultimately lead to more foreclosures and repossessions. By the way, Freddie Mac and Fannie Mae are looking for another bailout from the federal government. This one will be 5.5 billion dollars due to their low rate of return on investment.

I wonder how many lenders (banks, etc.) will still be in business in two years. I assume they will because to make up for the loss of interest income on mortgages and car loans they will simply raise fees on their customers. Can you say Stealth Tax? Will some businesses and corporations expand facilities and buy equipment only to encounter less demand for product as disposable income is eaten up with inflation and fees? Where will the money come from to finance these interest free loans? I know, we’ll print it. Again, the government is trying to push us into a consumption based economy but haven’t figured out that they are drying up our money supply.

The only thing that will save our economy is for every able-bodied person to produce goods and services for the world that people can afford. We need a production-based economy that will allow us to save and invest. We need to dry up the money supply flowing to the federal government and invest that money in the free market. The government does not produce wealth, it eats it. We need to stop debasing our currency by returning to the gold standard. We need all of the able-bodied people receiving government assistance to go to work. We need a national right to work law that will put us in a competitive position with other countries vis-a-vis wages and benefits. When the U.S. government backs our Fiat currency with the full faith and credit of the United States government, do you still believe that? Or, would you rather have something more substantial backing you up? Did you know that there are only 89 billion dollars in the FDIC account that insures your bank deposits?

JOHN W. LACAVA
Bath