Ron Paul on Inflation and Retirement

Ron Paul on Inflation and Retirement

Ron Paul on Inflation and Retirement

Hi, I’m Ron Paul, former presidential candidate and US Congressman and I would like to inform you about the dangers of inflation and how it could affect your retirement.

Retirement is becoming increasingly difficult in today’s world. Social Security benefits are meager, and the program itself will eventually collapse under its own weight. That’s why it’s important to have your own retirement savings, such as an IRA or a 401(k). But inflation erodes the value of those savings over time. The money you save today won’t be worth nearly as much in a decade or two.

Both throughout my time in Congress and during my Presidential campaigns, I always warned about the dangers of inflation and the fundamental problems of Social Security, and I still do. Here’s why.

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Inflation and the Federal Reserve

Inflation is an increase in the supply of money. The effect of inflation is a rise in prices, which in mainstream terms is referred to as the inflation rate, often referring to the Consumer Price Index (CPI). The rate of inflation in the United States is determined by the Federal Reserve System, which creates money out of thin air in order to boost nominal prices. But as prices increase, this means that the purchasing power of the dollar falls. So why does the Fed do this?

Inflation allows debtors to pay back their debts in the future with dollars that are worth less. It also harms savers, because their savings lose purchasing power every year. That means that inflation is just a massive transfer of wealth from savers to debtors. And who is the biggest debtor? The federal government, to the tune of $20 trillion.

This transfer of wealth to savers and debtors benefits the federal government and allows it to keep growing and spending money like a drunken sailor. It allows Wall Street and large companies to issue cheap debt and repay investors with devalued dollars. Savers and investors see the value of their savings eroded by inflation, while rising prices mean they have to pay more and more to maintain their standard of living. This is a fundamentally immoral system that must be abolished.

Social Security and Retirement

I’ve also advocated in the past for the eventual abolition of Social Security. It’s a fundamentally flawed system that’s on the verge of going broke. The first people to receive benefits never paid into the system, so they relied on people paying into the system to provide their benefits. And so it goes with each generation of retirees being funded by those still in the workforce. That means that the system is essentially one large intergenerational Ponzi scheme. It cannot be sustained.

Furthermore, the existence of Social Security causes many people not to save for their retirement because they think that the government will be there with Social Security checks to take care of them. What a rude awakening they receive when they see just how small their Social Security benefits actually are. Those benefits also don’t keep up with inflation, especially as the federal government likes to under-report the actual rises in prices. That means that people who rely on Social Security see their cost of living rising every year, while their benefits never keep up.

Social Security needs to be done away with, but it won’t happen overnight. Many retirees still rely on their monthly check to make ends meet. However, in the meantime, I think that young people entering the workforce should be allowed to opt out of Social Security, rather than spending their entire lives paying into a flawed system that will be broke long before they ever receive the benefits they’re supposedly paying for.

This would provide them with more income to put towards their own retirement plans, such as an IRA or 401(k). They’d have more control over their savings and more freedom to do what benefits them, rather working to pay for the current generation of retirees.

So what’s a great way to hedge against inflation and save more effectively for retirement? In my opinion, gold and silver IRAs are a great choice. Gold maintains its value in the face of inflation, so when you’re ready to retire it still has the same approximate purchasing power that it did when you first started saving. By putting a portion of your investment portfolio into gold, you can protect yourself against the negative effects of inflation, ensure that you won’t be totally reliant on Social Security, and make sure that your retirement is secure.