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Just Print the Necessary Funds


Tags Media and CultureTaxes and SpendingProduction Theory


Over the weekend I watched "Flags of our Fathers" and one quote stuck out (among others). It comes from a Treasury Department official (Bud Gerber) who is trying to convince the flag raisers of Iwo Jima to use their celebrity status in assisting him in a new bond drive.

He laments:

You know what they're calling this bond drive? The Mighty Seventh. They might've called it the "We're Flat F*cking Broke And Can't Even Afford Bullets So We're Begging For Your Pennies" bond drive, but it didn't have quite the ring.
They could've called it that, though, because the last four bond drives came up so short we just printed money instead.
Ask any smart boy on Wall Street, he'll tell you our dollar is next to worthless, we've borrowed so much. And nobody is lending any more.
Ships aren't being built, tanks aren't being built, machine guns, bazookas, hand grenades, zip.
You think this is a farce? You want to go back to your buddies? Well stuff some rocks in your pockets before you get on the plane, because that's all we got left to throw at the Japanese.
And don't be surprised if your plane doesn't make it off the runway, because the fuel dumps are empty. And our good friends, the Arabs, are only taking bullion.
If we don't raise $14 billion, and that's million with a "B," this war is over by the end of the month. We make a deal with the Japanese, we give whatever they want and we come home, because you've seen them fight, and they sure as sh*t ain't giving up. $14 billion! The last three drives didn't make that much all together.

In the revealing 1983 debate with then-Federal Reserve governor Charles Partee, congressman Ron Paul jokingly notes that if stranded on an island, the true value of fiat money comes full circle, because printing more of it will not in any form or fashion, increase the wealth or standard of living of the inhabitants. Thus the Fed would be persona non grata.

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