Restoring Middle Class Prosperity
America was founded on the idea that hard work gets you ahead. But that social contract has withered away owing to dysfunctional government policy that favors the wealthy while necessitating huge budget deficits to provide a safety net large enough to support those left behind. Despite advances in technology that have improved the standard of living, it has become harder for working people to support a family and for young people to establish a career. The next U.S. Senator from New Jersey must be a tireless advocate for solutions that restore the middle-class prosperity that was once a hallmark of this nation.
The most important hindrance to middle-class prosperity is the condition of the U.S. dollar. Since 1994 it has lost over one-third of its value, and lost 10 percent in the last five years alone since the Federal Reserve began its “Quantitative Easing” program of creating new dollars. The effect of rising prices is felt everywhere: at the grocery store, the gas pump, in medical costs, and school tuition.
Instead of serving the people, our money serves the federal government, whose trillion-dollar borrowing is the main cause of the Fed’s money creation. To restore the money supply in the hands of the people, we need a dollar whose value is backed by gold. Read my specific plan to do that. The gold standard, which stabilized the dollar under various iterations through most of U.S. history, is the proven way to encourage stable long-term prices and preserve limited government. This is why the Constitution in Article I, Section 10 directs Congress to “coin money” and “regulate the value thereof.”
While Washington has gotten free financing from the Fed, families planning for college, retirees living on a fixed income, and everyone else hoping to earn a decent return on their savings rather than speculating in the markets have fallen behind. It is a travesty that our monetary policy has deprived seniors, parents, and savers in billions of income so Congress can rack up more debt.
This is the direct result of the Fed’s policy of near zero interest rates, now in its sixth year. The suppression of interest rates below the market level has also broken down the traditional banking system, in which small businesses borrow from their local banks. The total value of all small bank business loans is approximately half of what it was when “zero interest rates” was adopted. Now, neighborhood standbys like hair salons and restaurants are forced to seek alternative forms of credit like cash advance loans that often come with 50 percent effective interest rates.
Small firms are responsible for most of the job creation in America – yet the Fed’s policy enables Congress to accumulate budget deficits and stifles local businesses from expanding and hiring. A turnaround in the fortunes of the middle-class waits not another government program, but a fundamental course correction in our nation’s monetary policy.