America's Financial Sins: Inflation, Taxation, and Fiat
The American financial system is complicated—maybe intentionally so.
Henry Ford remarked, "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning".
While many of us do not understand the financial system in depth, most people have a feeling that their money is highly manipulated.
In the Summer of 2023, Oliver Anthony released his song Rich Men North of Richmond. Overnight the song ranked #1 on the Billboard 100 and became the protest anthem of many working Americans.
The song is a passionate polemic against politicians who show they don't care about their people by raising taxes, causing inflation, and making it harder for everyone to get by.
Waking Up To The Grift
"Your silver has become dross,
Your drink diluted with water.
Your rulers are rebels
And companions of thieves;
Everyone loves a bribe
And chases after rewards.
They do not defend the orphan,
Nor does the widow’s plea come before them."
Isaiah 1:23.
Since our mission is to see the kingdom of God advanced here in America, we need to do something about the injustice of the leaders who run our monetary system.
Inflation and excessive taxation not only steal from orphans and widows, but they make it harder for others to help them. We cannot pretend that taxes need to be as high as they are, or believe that inflation "just happens".
Douglas Wilson writes about the American monetary system, "It is a sin to believe that our government is anything other than a pirate ship of the thieves, by the thieves, and for the thieves. It is a sin to go on believing the lies when we have no good reason to." (Mere Christendom p.23)
I'm not suggesting we start an overthrow or that we retreat into the classic conservative rage-filled inaction, but I'm suggesting you be aware of the financial grift that's happening. We cannot act like it's not happening.
Taxation
"For it is a minister of God to you for good...For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing."
Romans 13:4a, 6.
What are taxes for?
Why did God give the government the authority to collect taxes? Because governments are supposed to serve God by serving the good of the people (Rom. 13:4-6, as quoted above).
Is that what's happening in America? Is the government spending our tax money to serve God and promote our good? Looking at just the past few years, most of us would say no. Foreign wars, transgender surgery, and abortions are among the most abominable uses of tax dollars.
Adding up all the ways we're taxed, the average American gives the government 30% of their income.
However, you almost don't notice it. It's made as invisible as possible. It's bundled into your mortgage payments, baked into the gas prices, tacked on to your purchases, and skimmed off your paychecks before they enter your bank account.
30% is a lot of money.
If God commands we give 10% (Lev. 27:30) to His service, how can the government demand 30%?
The reason the government demands this much money is that the government has become larger and more involved than it needs to be. 30% is excessive but it's still not enough to keep America financially sound.
One man remarked on Twitter/X, "Imagine stealing 30% of everyone's money and still being in over $33T of debt."
Inflation
Inflation does not just happen.
Before America got off the gold standard, the only way to increase the money supply (monetary expansion) was to add more gold to the US reserves. This practice put a governor on how much new money the government could create. Today, the government can print as much money as they see fit.
Therefore, we cannot say that monetary expansion happens organically. It is a deliberate decision. And each time it happens it drives up the cost of living, making our dollars worth less and less.
Because this is the case, monetary expansion, which results in inflation, is another way the government taxes not only our income but also our savings.
The practice of artificially inflating currency is not new. It used to be done by reducing the purity of metal coins, or by clipping small pieces of the precious metal from the edges. Before America dropped the gold standard in 1971, the government began slowly reducing the percentage of gold required to be held in reserves to make it possible to print more money.
The prophet Isaiah denounced this kind of currency debasement that was happening in his day by saying, "Your silver has become dross, Your drink diluted with water." (Is. 1:22).
This slow debasement of a nation's currency eventually results in what is called "fiat" money.
Fiat Currency
A fiat currency is not backed by any precious metal or asset.
The word "fiat" means "by decree". A fiat currency is not backed by anything except the trust the people have in the government. This form of money is what makes all this manipulation possible.
The United States did not issue paper money until 1861.
Until then, all currency under our constitution was minted in precious metals. Even when paper money was first issued, each dollar was still redeemable for about a gram of gold. By that system, the value of our money was in the gold it could be redeemed for.
However, fiat money is only seen as valuable because we all trust the financial system. Therefore the value of our money is centralized in the American government and subject to how much they want to inflate the money supply.
If the government wants to fund a foreign war but they do not have the funds, it can quietly and quickly print money instead of raising taxes or cutting spending. Then in just a little time, prices will begin to rise and people will become poorer.
This is theft. This is evil.
“How the faithful city has become a harlot,
She who was full of justice!
Righteousness once lodged in her,
But now murderers.
Your silver has become dross,
Your drink diluted with water.
Your rulers are rebels
And companions of thieves;
Everyone loves a bribe
And chases after rewards.
They do not defend the orphan,
Nor does the widow’s plea come before them.
Therefore the Lord God of hosts,
The Mighty One of Israel, declares,
“Ah, I will be relieved of My adversaries
And avenge Myself on My foes.
I will also turn My hand against you,
And will smelt away your dross as with lye
And will remove all your alloy.”
Isaiah 1:21-25
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