It has been argued that Libertarians are obsessed with our Gold Standard – it is not so much that we are obsessed with it, but rather we see the significant problems with the fiat money system. It gives rise to what the Austrian school of economics identifies as the “boom/bust cycle.” Bluntly put, the Austrian school calls Keynes out as the idiot/madman/crackpot that he was. His method of macroeconomics and chasing the elusive “perpetual boom” is very dangerous to this country’s economic well being.

The Federal Reserve basically pulls money out of thin air. The government sees the damage done by counterfeiting money as evidenced by the fact that it is illegal to do so. The Austrian school calls the Federal Reserve out as the biggest counterfeiting scheme ever concocted. Not only does it counterfeit, but it artificially lowers credit. Between counterfeiting money and giving artificial market indicators, it is the very Central Planners at the Federal Reserve that America now looks at to “fix” the economy who encouraged the economy to grow faster (the “boom”) than it could sustain (the “bust”). When Tim and Ben decide they are going to screw with the Market, she will inevitably screw with us.

One might question “If the Central Planners do not determine interest rates, won’t the Big Banks and Wall Streeters take us out to dry?” Absolutely NOT! The laws of economics will not allow it. The money supply will be the key to telling businesses if the economy can sustain the level growth to expand their businesses with long-term projects. That “Invisible Hand” will govern the interest rate. When people save, more money is available and interest rates will come down.

Not only will this help businesses understand what consumers are actually doing because there is a correct economic indicator, this is also excellent for preventing the boom and subsequent bust by keeping those who have no desire or knack for speculation and investing out of the way. Some people just do not need to be speculating. Every boom feeds on speculation, easy credit and easy money which, inevitably, bring us to the bust. However, with the current state of affairs, the average Jane has to understand and speculate in order to attempt to keep up with inflation. With inflation completely under control as the money is now backed up with gold, Jane is now free to save her money in an IRA or a CD collecting interest on her principle rather than engaging in speculation she has no interest in participating in.

So you see, the free market indeed did NOT fail. The Central Planners need to abolish the Fed, step down and actually let the Market correct the mess that the Fed created

“The solution is simple,” declared Libertarian Party of Tennessee Chair Tony Wall, “Take the money. The Libertarian Party of Tennessee opposes the passage of all federal ‘bail-outs’ but, unfortunately, the money has been appropriated and, after all, it belongs to the taxpayers.” Unfortunately, the bi-partisan unity ends there.

“The Tennessee State legislature needs to use the funds to reduce the state’s high sales tax,” said Wall. “History has proven the most effective way to stimulate an economy is by reducing taxes. By tightening its belt, as Tennessee citizens have already done, the State can use the $4.28 billion over the next two years to drastically reduce the tax burden on its residents and revitalize our states’ economy.

The State of Tennessee government needs to sacrifice, like all Tennesseans, and balance the budget without the ‘bail-out’ funds. Eliminating the Dividend Income Tax will encourage new retirees to select Tennessee as their new homeplace and reducing the sales tax will revitalize border towns around the state, which all currently suffer a competitive disadvantage due to high taxes.”

Mr. Wall admits the short term effects will be painful but it is necessary in order to overcome the recession and create a stronger, more inviting environment for future growth. “Tennessee cannot control the rest of the Nation but we can take care of our own, as we have already proven time and again. I encourage all Tennesseans to demand fiscal discipline from their elected officials during this time of crisis.”

For more information about the Libertarian Party of Tennessee, please visit www.lptn.org or call us at 888-960-1776.