Federal Reserve Chairman Janet Yellen stated in her recent testimony before the Senate Committee on Banking, Housing, and Urban Affairs, “Financial conditions in the United States have recently become less supportive of growth…”
She tells us that “…the economic outlook is uncertain.”
The main focus of her testimony was a disjointed hodge-podge of various observations of factors affecting the economy.
I understand her conclusion what the Federal Reserve will do as regards monetary policy is that it will remain “accommodative.”
This accommodation is necessary because of a “range of persistent economic headwinds.”
What she refused to mention was one word about the single greatest “headwind” affecting every aspect of the economy.
What is that factor which, as they say, is the elephant in the living room that everyone ignores?
From before birth until after death, our lives, the lives of our parents, and the lives of our children are dramatically affected by governmental tax policy.
Government is formed to organize society for the well-being of its citizens. Government is given the power to raise money by way of taxation to fund its legitimate functions. Then politics takes over.
The politicians get that money from the economy. Specifically from you.
All of your efforts in producing goods and services and their consumption are directly influenced if not dictated by politically driven tax policy.
The money derived from taxing you is the lifeblood of political power and keeps politicians in power.
When Yellen talks about the Fed using accommodative policies, she is talking about accommodating political goals and objectives.
She is wrong when she tells us that financial conditions have only recently become less supportive of growth.
Tax policy has always distorted private economic activity.
It has always been a headwind against economic growth since it drains and misallocates precious capital for political purposes.
This perversion of tax policy and the oppression necessary to enforce it is killing the American economy.
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