The Federal Reserve’s latest comments on interest rates are encouraging.  Chairman Powell continues his statements about reducing rates.  This action reduces the cost of borrowing, which allows businesses to expand, resulting in job growth, economic expansion, and prosperity for the greatest number of people.  

However, the Fed still hasn’t addressed the reason behind inflation, excess money supply, and its offspring, federal spending, which caused the massive debt in which federal spending has placed every citizen.  Until Congress addresses its spending excess and the Fed reduces money supply, we will remain subject to devaluation of the dollar and thereby inflation in prices.  In other words, we will spend more dollars to obtain the same commodity.  And we will suffer, even if rates decline.

Excessive federal spending is the greatest threat today to our future.  It depletes capital and diverts it into government hands and out of free enterprise.  Spending creates debt that further weighs on citizens, who must pay it back.  Money supply, printing dollars by the Fed, assists Congress in spending more than it makes and puts the citizen in debt.  This is taxation without representation.

Suffice it to say that politicians, regardless of party affiliation, will never reduce spending on their own.  The citizen must demand they reduce spending and then pay down the debt.  Only when politicians fear not being re-elected will they act on our behalf.  Our own salvation, and especially that of future generations, depends on our active involvement. 

We are all aware of the concept, in our nation’s founding documents, that the citizen will be protected from his government’s excesses.  The greatest concept employed was separation of powers, that all three branches had clearly defined powers and more importantly limitations.  We can read those limitations in the Constitution and Bill of Rights.

One other brilliant method our Founding Fathers implemented is that they gave the limited right to tax and spend only to Congress — not the President or SCOTUS, not the administrative state or regulatory bureaucracies.  The reason is that these elected politicians had to stand before the citizens on a regular basis — the citizens could vote them out.

That is the duty of any citizen who lives in a free America.  To fulfill our obligation of remaining free citizens, and passing those freedoms on to our children, we must limit the government’s sizable power according to the law of the land, the Constitution.

It is a wise man, knowing that he will never sit under its shade, who plants seeds for a tree that will eventually shelter his grandchildren.  That tree is individual freedom and responsibility.

Jay Davidson is founder and CEO of a commercial bank.  He is a student of the Austrian School of Economics and a dedicated capitalist.  He believes there is a direct connection joining individual right and responsibility, our Constitution, capitalism, and the intent of our Creator.

Image: GRID-Arendal via Flickr, CC BY-NC-SA 2.0.