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Tuesday, April 12, 2011

Ayn Rand On Inflation

I’ve recently come across a collection of Ayn Rand newsletters from the 1970s. I was instantly shocked at how relevant she was to today. Almost as if she was anticipating the nonsense of today’s politicians. Today’s federal government is printing money to pay for debts that keep growing. And adding more debt to cover interest on the debt. Inflation has hit again and looms larger in the future. Here’s what she wrote in the Ayn Rand Letter of July 15, 1974: Let us suppose you have $1,000 in a savings account. If the current rate of inflation is 10%, you lose $100 a year – the government is robbing you of that amount, as surely as if it took the bills out of your pocket. Are you permitted to write that loss off on your tax return? No – the government is pretending that the loss did not occur. But the bank pays you, say, 5% interest, i.e., $50 a year – does this make up for half your loss? No – because the government regards bank interest as “unearned income,” and taxes you on it (the amount of the tax depends on your income bracket). Are there any public voices – in this age of “social conscience” – protesting against so vicious an injustice? No. Do not ask therefore for whom the bell of inflation is tolling; it tolls for you. Inflation is a symptom of the terminal stage of that social disease which is a mixed economy. A mixed economy (as I have said many, many times) is an invalid, unstable, unworkable system which leads to one of two endings; either a return to freedom or a collapse into dictatorship. In the face of an approaching disaster, what is the attitude of most of our public leaders? Politics as usual, evasion as usual, moral cowardice as usual. I could not have said it better about today’s politicians. Thank you Ayn Rand!

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