On Thursday, July 10, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke testified before the U.S. House of Representatives’ Committee on Financial Services. The backdrop for the committee meeting, of course, is the ongoing turmoil in U.S. and global financial markets, highlighted by the Federal Reserve’s unprecedented intervention to prevent the failure of giant investment bank Bear Stearns, and more recent worries that the two government-sponsored mortgage lending companies Fannie Mae and Freddie Mac are in danger of implosion.
The Consumer Price Index (CPI) measures the average price of consumer goods and services purchased by households. The government uses the CPI to “calculate inflation.” Changes over the past 40 years to the CPI “to better reflect the actual costs” of goods and services in this country have not only provided a poorer reflection of the true costs but have actually harmed our economy.
From Nouakchott in northwest Africa to Port-au-Prince in the Caribbean, the situation is becoming grimmer by the day. The specter of world hunger, unseen in generations, even in the world’s poorest nations, is once again raising its head as food prices spiral out of control, leaving hoarding, rioting, and shortages in their wake.
Although tax season has come and gone once again, the various proposals for tax reform are still with us. These tax-reform plans, even though they appear outwardly to be quite different, have one thing in common that dooms them from being taken seriously by advocates of liberty and less government: they are all revenue-neutral plans seeking the most fair and efficient way to fund the federal government’s ever-increasing, multi-trillion-dollar budgets.
At a conference on April 16, Richard Fisher, president and chief executive officer of the Federal Reserve Bank of Dallas, warned that the U.S. economy could be facing trouble in the future. “According to official government reports,” cautioned Fisher, when it comes to wealth transfer programs including Social Security and Medicare “the gap between what we will take in and what we have promised to pay … now stands at $83.9 trillion.”