The Stealth Tax

Greetings.

I hope everyone's week has been a blessed one. Plenty going on in the world, per usual, which makes it difficult to narrow it all down to just one topic per week (which is my intent). Olympic events, government crackdown on protestors in the Ukraine, and dozens of other newsworthy stories across the wire are competing for ratings and viewership. However, I would like to call our attention this week to (somewhat) lesser known news story that perhaps hasn't gotten as much press as it should , but CERTAINLY affects our life nonetheless in about as profound a way as could possibly be imagined; way more so than the Olympics or happenings in Kiev.

I'm talking specifically about the possibility of (yet another) minimum wage increase at the federal and state levels as a means to combat, in the words of President Obama, "income inequality." While the jury is still out which way any vote in Congress is likely to go, we can probably be fairly certain that any vote will likely divide both houses along party lines.

However, rather than debate one side of the issue from the legal or ideological angle of whether or not the minimum wage should (or should not) be raised, I would prefer to look at one significant (and overlooked factor) that has in fact been driving up the minimum wage for decades since its inception in 1938. Specifically, I'm referring to inflation, also unofficially referred to often as the "stealth tax." Ever since President Franklin Roosevelt essentially confiscated Americans' privately-owned gold and shifted America's monetary policy away from the gold-backed standard that was used for our currency in 1933, the value of our dollar has decreased. So bad has it become, in fact, that, according to www.usinflationcalculator.com, it would take $2,362.79 today in order to purchase goods that were worth $100 in 1913.

This is due largely to the authority given to the Federal Reserve to basically print money out of thin air and "quantitatively ease" the financial hardships of Americans as more paper money is injected into the economy. Problem is, more fiat money (as it is called, since it's not backed by a real valuable commodity such as gold) results in less purchasing power due to the dollar's diminishing value.

Fast-forward to 2014. As the dollar's value is reduced due to its not being tethered to gold or another commodity, that means that more paper dollars are needed in order for Americans to afford the goods and services they rely upon and want. That, of course, leads to a need for higher wages and pay just to so Americans can make up the difference between higher costs and their own earnings. And this is what essentially drives the entire discussion of hiking the minimum wage again and again.

People complain about taxes driving up the cost of goods and services, and they do. But there's a reason inflation is often referred to as "the Stealth Tax." Simply put, it rarely gets much press, but has steadily been eating away at the earnings of Americans at every income level for decades. We need a return to the gold standard.

The only problem is, neither major party is even hinting at the possibility of making such a drastic move. Whether its fear of their own constituents and potential loss of power, or whether they simply don't understand or believe in basic economics and sound money we may never know. The bottom line is that our money will continue to lose value as long as our monetary policy remains as unsound as it has been for the better part of a century.

It is incumbent upon us as citizens to lobby our elected officials at the local, state, and federal level to push not only for a more sound monetary policy, but also to push for the elimination of laws against legal tender. Free citizens should be allowed to barter and trade with their fellow man as they see fit, rather than be tied to a federally-created, federally-controlled, and federally-mandated paper currency that is killing their purchasing power and robbing them of their wealth. My encouragement thus is for you to get involved and stay involved and vigilant. It is your future.

Until next week, live free or die.

-Warren Brisbane