Actually, they've done a great job. You are mistaken if you think their job is price stability. The buying power of the dollar went up in the eight or so decades preceding the formation of the Federal Reserve by about 20% (I forget the exact amount). Since then (nine decades, roughly), the purchasing power of the dollar has declined 94-95%. What they strive for in a guaranteed, controlled, but positive wage and retail inflation, ideally to halve your money every 8-12 years. You'll pay tax on the "gain" of course if you keep up. That is, if your taxable account doubled, you'd owe between 15 and 35% taxes, which means they've clipped off a huge chunk of your nest egg.
That is your "stealth tax" and is ideally suited to the entitlement generation more than any other which embraces politicians claims of "somethin' for nothin'" e.g. the Iraq War, Medicare Drug Plan, the 500 million dollar bridge to nowhere in Alaska, etc. This stealth tax (which I'd guess > 99% of the population is ignorant of and actually views the process in a positive light because they get "raises") actually creates a disincentive for any scrutiny of government expenditures, fraud, whatever, because "nobody" has to pay so who cares?
It's quite a game and was learned generations ago when it was observed that direct taxation results in a politician losing his/her job; but a stealth tax actually keeps them in office.
Just so long as the inflation authorities don't bungle it up, e.g. the early to mid 70s and the early 30s. Also, in the past 20 years, they've also failed in that only the top 10%, and especially the top 4% and top 1/2% have seen real gains. The rest have experienced a drop in buying power of their wages savings.
And of course, when I say they "failed" in the past twenty years, I mean "wildly succeeded" because they don't work for us, they work for the well connected and the elite. |
