The greatest abuses, however, derive from the politicization of money, banking, and finance. Banking and government have become intertwined and mutually dependent. In return for its privileged position, the banking cartel must assure that the central government is able to borrow and spend virtually any amount of money it wishes. What this means is that the banking system will create enough new money to allow the market to absorb the new government bonds which must be issued to finance the deficit. Thus, it allows the government to spend as much as it wishes without raising taxes directly.
Economists often argue that inflation is caused by too much money in circulation.
This would seem to refute the contention that money is chronically in short supply. The answer to this is that inflation is not caused by the amount of money per se, but by the fact that some of the money in circulation is improperly issued and misallocated. This phenomenon will be discussed more thoroughly in Chapter 9. The people have been cut out of the most important decision process, that of determining how the aggregate wealth of the nation, the fruits of everyone's labor, will be spent. How Money Pumps Wealth From the Poor to the Rich.