Letter to National Review re: Bank of America, by Kevin D. Williamson

From: patrickbarron@msn.com
To: submissions@nationalreview.com; letters@nationalreview.com
Subject: Re: Bank of America by Kevin D. Williamson
Date: Tue, 28 Sep 2010 09:57:11 -0400

Dear Sirs:
Among many of Kevin D. Williamson's excellent and pointed comments about Obama's new "infrastructure bank" is this one: "...the Fed...whose managers pay the very highest prices for the very worst assets...". Mr. Williamson then exposes the bizarre world of government earmarks for projects that no one would fund if asked to do so privately. And herein lies the main problem--where does the Fed get all that money for its bloated balance sheet of dubious assets and where does the government get all that money for its new infrastructure bank? Well, it manufactures it out of thin air; in other words, it counterfeits it. The government commands real, scarce resources with non-scarce, fiat money. It has found the Midas touch, at least for awhile. But each expansion of the money supply reduces the purchasing power of money already in circulation in addition to causing structural dislocations, such as the housing bubble. Unchecked expansion of fiat money is undermining our economy and is the greatest threat to our nation today. Bizarre spending is merely a symptom of the disease.

Patrick Barron