Taxes, Depression and Our Current Troubles

This article was in the Wall Street Journal today. Obviously, the author (who was an economist for Ronald Reagan) isn't quite convinced that our recession is over.

What I found interesting is that he refers to Depression history to remind us that the Federal Government seized all U.S. citizen's gold under the Gold Confiscation Act of 1933.

Regular readers of this blog will remember that I have posted about this Act in previous posts.

In early 1933, the federal government (not the Federal Reserve) declared a bank holiday prohibiting banks from paying out gold or dealing in foreign exchange. An executive order made it illegal for anyone to "hoard" gold and forced everyone to turn in their gold and gold certificates to the government at an exchange value of $20.67 per ounce of gold in return for paper currency and bank deposits. All gold clauses in contracts private and public were declared null and void and by the end of January 1934 the price of gold, most of which had been confiscated by the government, was raised to $35 per ounce. In other words, in less than one year the government confiscated as much gold as it could at $20.67 an ounce and then devalued the dollar in terms of gold by almost 60%. That's one helluva tax.

The author also goes on to remind us that printing copious amounts of money can have serious consequences to an economy...and that YOU CAN have inflation even during times of high unemployment.

Read full article here; http://online.wsj.com/article/SB10001424052970203440104574402822202944230.html?mod=googlenews_wsj

When you stop to ponder how economies actually work and how it is that paper money is backed ONLY by the "full faith and confidence" in the U.S. Government....you begin to realize that Kingdoms on earth will only last as long as God says they will last.