(JustPatriots.com)- In an interview with Brad Polumbo this week, Senator Rand Paul gave his take on what is driving the current inflation woes.
According to Senator Paul, at the heart of the problem is the Federal Reserve printing money to buy government debt. The newly printed money enters circulation, expanding the money supply and leading to inflation.
Calling inflation a “bait and switch” form of taxation, Paul explained that when the government offers the American people “free” stuff – “free” healthcare, “free” college, “free” childcare – it isn’t free. It is either paid by someone else through higher taxes, or the government will pay for it through more borrowing. This will ultimately result in higher inflation which is a regressive tax. And the same people getting offered “free” stuff end up being the ones most hurt by that regressive tax.
Regarding the current inflation surge, Paul said that both parties are responsible for the inflation we’re experiencing. Since the COVID pandemic began, Congress spent trillions in debt-financed “relief.” Before Biden became president, Congress had already borrowed between three and four trillion dollars, he explained, “and we’re set to borrow at least that much or more this year.”
As a result of all that borrowing, Paul thinks we may see 10 to 12 percent inflation in 2022. Contrary to what the Federal Reserve and the White House have been saying, this inflation isn’t “transitory,” according to Senator Paul. Already this year, Congress spent another $2 trillion on COVID “relief” which had very little to do with COVID relief. And now, Biden signed another $1.2 trillion in spending on “infrastructure.”
But it isn’t just Congress who’s to blame for this inflation, Paul explained. The Federal Reserve bears a lot of responsibility as well. First Congress spends money we don’t have, then the Fed steps in and buys the added debt which then increases the money supply. “They go hand-in-hand,” Paul explains.
Paul believes that the one solution is to require Congress to balance the budget. If we had a balanced budget, Paul explained, “we wouldn’t necessarily need a Federal Reserve” because right now the only purpose of the Fed is to buy debt.
Watch Brad Polumbo’s full interview with Rand Paul HERE.