Wednesday, July 7, 2010

Founders and President's Quotes

George Washington

"It is impossible to rightly govern a nation without God and the Bible." -George Washington (Some controversy over whether true or not)

Thomas Jefferson

“I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy.”-Thomas Jefferson

“All tyranny needs to gain a foothold is for people of good conscience to remain silent." -Thomas Jefferson

"I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it." - Thomas Jefferson

"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." —Thomas Jefferson

"When the people fear their government, there is tyranny; when the government fears the people, there is liberty." - Thomas Jefferson

"The strongest reason for people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government." --Thomas Jefferson

“A government big enough to give you everything you want, is strong enough to take everything you have. “ -Thomas Jefferson-

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” -Thomas Jefferson

“A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.” -Thomas Jefferson

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." – Thomas Jefferson

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson, 1802 (Attributed)
"Do not bite at the bait of pleasure, till you know there is no hook beneath it."
- Thomas Jefferson –

'But it does me no injury for my neighbor to say there are twenty gods or no God. It neither picks my pocket nor breaks my leg." -Thomas Jefferson, Notes on Virginia, 1782

There is nothing more unequal than the equal treatment of unequal people.
-- Thomas Jefferson

“No man has a natural right to commit aggression on the equal rights of another, and this is all from which the laws ought to restrain him.” - Thomas Jefferson

"The two enemies of the people are criminals and government,so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first." Jefferson

"I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared" -- Thomas Jefferson.

Ben Franklin

"When the people find that they can vote themselves money, that will herald the end of the republic." - Ben Franklin.

“Those who would give up Essential Liberty to purchase a little Temporary Safety. deserve neither Liberty nor Safety.” - Ben Franklin

“Repeal that [welfare] law, and you will soon see a change in their manners. ... Six days shalt thou labor, though one of the old commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves, than could be done by dividing all your estates among them.” Benjamin Franklin

“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well- armed lamb contesting the vote.” -- Ben Franklin


“Wherever the real power in a Government lies, there is the danger of oppression. In our Governments the real power lies in the majority of the community, and the invasion of private rights is chiefly to be apprehended, not from acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of the Constituents.” –James Madison

Americans have the right and advantage of being armed – unlike the citizens of other countries whose governments are afraid to trust the people with arms. – James Madison

“With respect to the words general welfare, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” James Madison

John Adams

“Be not intimidated... nor suffer yourselves to be wheedled out of your liberties by any pretense of politeness, delicacy, or decency. These, as they are often used, are but three different names for hypocrisy, chicanery and cowardice.” - John Adams

John Adams said, "There are two ways to enslave a nation. One is by arms. The other is by debt.”

"All the perplexities, confusion and distress in America arise not from defects in their constitution or confederation, not from a want of honor or virtue so much as from downright ignorance of the nature of coin, credit, and circulation." John Adams

Patrick Henry

“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government - lest it come to dominate our lives and interests.” Patrick Henry

Patrick Henry said, "Fear is the passion of slaves."

Samuel Adams

If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you. May your chains set lightly upon you; and may posterity forget that ye were our countrymen. – Samuel Adams

"It does not take a majority to prevail, but rather an irate, tireless minority keen on setting brushfires of freedom in the minds of men." -- Samuel Adams

Andrew Jackson

"You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning." --Andrew Jackson, 1828

Abe Lincoln

"America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves." -- Abraham Lincoln

“As I would not be a slave, so I would not be a master. This expresses my idea of democracy.” Abraham Lincoln

Property is the fruit of labor. Property is desirable, is a positive good in the world. That some should be rich shows that others may become rich and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him work diligently to build one for himself, thus by example assuring that his own shall be safe from violence. – Abraham Lincoln 

Calvin Coolidge

Perhaps one of the most important accomplishments of my administration has been minding my own business. – Calvin Coolidge

Liberty is not collective, it is personal. All liberty is individual liberty. – Calvin Coolidge, 30th US President

"We do not need more intellectual power, we need more moral power. We do not need more knowledge, we need more character. We do not need more government, we need more culture. We do not need more law, we need more religion. We do not need more of the things that are seen, we need more of the things that are unseen.... If the foundation is firm, the superstructure will stand." -Calvin Coolidge

"It is much more important to kill bad bills than to pass good ones." -Calvin Coolidge

"The collection of taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny. The wise and correct course to follow in taxation is not to destroy those who have already secured success, but to create conditions under which everyone will have a better chance to be successful." -Calvin Coolidge

"Government price-fixing once started, has alike no justice and no end. It is an economic folly from which this country has every right to be spared." -Calvin Coolidge

Woodrow Wilson

"Conformity will be the only virtue and any man who refuses to conform will have to pay the penalty." Woodrow Wilson

“Government, in it's last analysis, is organized force.” – Woodrow Wilson


“I do not believe in communism any more than you do, but there is nothing wrong with the communists in this country. Several of the best friends I have are Communists.” FDR


"Without debate, without criticism, no administration and no country can succeed --and no republic can survive." ~President. John F Kennedy April 27, 1961

Ronald Reagan

The Government is like a baby's alimentary canal, with a happy appetite at one end and no responsibility at the other. – Ronald Reagan

"If you analyze it I believe the very heart and soul of conservatism is libertarianism." ~ Ronald Reagan

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.  - Reagan (1986)

Friday, July 2, 2010

Inflation 101

According to the Economic textbook,- Private and Public Choice. 12th Ed., inflation is the sustained increase in the general level of prices. As inflation increases, there will be a rise of prices for goods and services. In order to determine an approximate inflation rate, economists commonly use CPI (consumer price index) and GDP (gross domestic product) deflator for their measurement analysis.   The text lists two types of inflation.

1-     Unanticipated inflation
2-     Anticipated inflation
Unanticipated inflation is an unexpected Increase in price levels that most individuals were unaware of. Anticipated inflation is the expected increase in the inflation rate. (Gwartney, Stroup, Sobel, Macpherson, 2008).

In contrast from contemporary economics, Ludwig Von Mises stated the classical definition of inflation “means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check.” Mises also noted that “people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation.”( To sum up the difference, the textbook says that the rapid expansion of a nation’s stock of money causes inflation where Mises would argue that inflation is the expansion of money stock in itself and just one result may be higher CPI. An example of how inflation (textbook definition) can be misleading is if price levels are meant to decrease 5%, an expansion in the money supply can cause prices to remain steady or slightly increase but we will say the CPI is 0% after the expansion.  The difference in what the price is without monetary expansion and the current price could be considered inflation (5%) even though we see no change in the actual price.  The problem is determining what the “would be” price/cost is before a monetary expansion because the prices can become distorted and do not impact the all sectors of the economy in the same way. Based off the modern definition, there is no inflation however based on the classical definition, there is inflation.

A potential unintended consequence with a modern definition of inflation could be that by continuously printing money, the Fed “diverts real funding away from wealth generators toward the holders of the newly created money. This sets in motion the misallocation of resources, not price rises as such. Moreover, the beneficiaries of the newly created money-i.e., money "out of thin air"--are always the first recipients of money, for they can divert a greater portion of wealth to themselves. (Frank Shostak, 2002)  With an artificial monetary credit expansion, comes an artificially lower interest rate, which often sends signals to speculators, regular investors, and consumers to buy and/or continue to buy instead of saving. This can send the wrong signs to the market, leading to a “bubble” within an economy. Ups and downs are natural in a market economy but they are often compounded by the Fed flooding banks with newly created money (monetary expansion) which can result in digging a hole even deeper.  Economists may not anticipate actual inflation beyond just price increases based off the CPI and other measurement instruments, resulting in an exponentially larger “bubble” within an economy.  If we are to regard inflation as a general rise in prices, we could reach misleading conclusions regarding the state of the economy.

Depending on one’s definition of inflation, the economy could be seeing massive inflation (classical definition) or the economy may be somewhat stabilized (modern definition). Even based on the textbook definition of inflation, Gerald O’drescoll of the Cato institute adds just one of the numerous cautions to the chairman of the Fed, Ben Bernanke, after several senior Fed officials’ warnings that “Most economic forecasters profess to see little inflation risk. They need to reconsider their forecasts in light of the inflation warnings from within the central bank” (, 2009). My empathy goes to the elderly on fixed incomes and numerous other groups who are not able to increase their income or savings to keep up with a monetary system of constantly expanding credit. Many are currently on pay freezes, like myself for over two years, and a higher CPI could be devastating to many people’s standard of living and purchasing power. A bill growing in popularity with the American people is to fully audit the Federal Reserve (HR: 1207 or S: 604).  The Federal Reserve transparency act is very important as they have never had a full audit since its inception on 1913.


Gwartney D.J., & Stroup, R.L., Sobel, R.S., Macpherson, D.A. (2009). Economics: Private and Public Choice. 12th Ed. Ohio: South-Western College Pub.

Mises, L. (1951). Inflation: An Unworkable Fiscal Policy. (Online) Ludwig von Mises Institute. Retrieved October 27, 2009, from

O’Driscoll, G. (September 30, 2009). Inflation Warning. (Online) CATO Institute. Retrieved October 27, 2009, from

Shostak, F. (2002). Defining Inflation. (Online) Ludwig von Mises Institute. Retrieved October 27, 2009, from