Americans spend a lot of time talking about the price of things like gasoline, food, clothing, and education. We also spend a lot of time and energy concerned with the price of money (namely, interest rates), but we think of it as something we have even less control over than the commodities we can't live without.
I have an idea for you.
There is one thing Americans can do to take back some measure of control over our interest rates. We simply must support the FairTax. Doing so would cause our interest rates to decline by as much as one-third.
To understand why, it is helpful to view interest rates from the proper perspective. Interest rates are nothing more than the price we pay to purchase money. That is what we do when we take a mortgage, a car loan, or plunk down a credit card. When we do these things we obligate ourselves to pay back the borrowed money and pay interest as well. That interest "price" pays the financial institution's profit and overhead, which, of course, includes its federal income taxes. When the FairTax is implemented, there will be no more federal income tax. So banks will be able to make the same profit on approximately one-third less revenue. In the hyper-competitive financial services industry, that means prices are coming down.
So if were looking for one more reason to support the FairTax, here is one: lower interest rates. Spread the word.
