Peter Schiff - Government creates inequality, not prosperity

Transcript:

So many people blame inequality on capitalism, right! These guys are greedy. They're out of control. We need to rein them in. We need to tax them. Can you correct that myth? Why is it that this isn't capitalism? And why do we see this wealth inequality growing as a result of what government is actually doing?

Peter Schiff:

As far a inequality is concerned, look, there's always going to be inequality. Even in socialism, there's inequality. You have a few people that are rich and everybody else is broke. And the people who are rich are the people that are in government, and they have connections, and they have power because they know the right people.

We have extreme income inequality now. That's not a byproduct of capitalism. What's going on now is the Federal Reserve, which is not a capitalist institution, has got interest rates artificially low, so that people that have a lot of assets can now borrow money really cheap and buy more assets. And now all those asset values become inflated by the artificial interest rates. So no the people who are just sitting on assets and doing nothing become really, really rich, simply because they're sitting on appreciating assets that are only appreciating because of the artificial manipulation of interest rates. And now instead of selling those assets, they just borrow against them. They never have to pay the money back, because the assets never stop going up. And they are living off of the inflation and the cheap money.

At the same time the inflation is destroying the value of average people's wages and savings. And so now you have government coming in and exacerbating income inequality and taking it to a level that is problematic, that would never exist in a free market. Because, hen you're getting rich in a free market, you're getting rich by enriching everybody else. So all the boats rise together. The government has basically prevented that from happening. So you have some boats rising while other boats are sinking. Capitalism doesn't do that. Government does that.