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A young couple in your town did what they were supposed to do.
They finished school and took skilled jobs. They skipped the summer trips, kept the old car running, and moved back in with her parents for a year to stack every possible dollar. By 2021, they had a real down payment for a modest starter home — the kind their grandparents bought on one income without calling it a miracle.
It took them months to pull the offer together. When they finally did, the house was out of reach again. It’s now up to fifty, sixty, eighty thousand dollars in a single year. The new house wasn’t revamped or anything. It’s got the same vinyl siding. Same cracked driveway. Their hard-saved down payment now bought less house than the day they started saving.
That is the quiet cruelty built into our status quo. You can follow every wise piece of advice and demonstrate every virtue of frugality and temperance and still lose ground, because the ground itself keeps shifting.
How and why is this happening?
The people who manage our economy through dollar creation —the Federal Reserve System— have overshot their mandate for about 60 months straight to keep inflation reasonable. This was particularly exacerbated in housing for many reasons we’ll get into later. If your wages don’t grow faster than the Fed’s monetary policy, you fall behind. That is, unless you leverage up dramatically and finance the inflated valuations of homes as they are, which defeats much of the purpose of owning a home.
Now, if that doesn’t make a lot of sense to you, this article is for you.
An Invisible Thief to the American Dream
The Federal Reserve sets interest rates — functionally, the price of borrowing money. When it holds the price below what the market would set, it creates new dollars and pushes them into the economy. Normally, the money you borrow comes from someone else’s savings. Here, nobody saved first. It’s brand-new money chasing the same supply of homes and land.
That is inflation: the expansion of the money supply that drives prices higher.
It’s important to note that the new dollars entering the economy don’t fall from the sky. They flow first to the banks, the government, and the largest borrowers closest to the source – the Fed. They get to spend the fresh money before prices fully adjust. Everyone else — the nurse, the tradesperson, the young couple saving for that starter home — receives the higher prices without the head start. This is the Cantillon effect.
For a hundred years, when the dollar has lost value, land and houses have been among the best places to shelter money. So home prices rise fast, and wages move more slowly. The house runs away from the down payment.
The young couple wasn’t just competing against other buyers. They were competing against a system that was creating new dollars and sending a large share of them into the housing market, while local zoning laws made it extremely hard to build enough new homes. Their savings were running on a treadmill that was being sped up by the monetary system.
Worse, this is a short-run political and economic game with a terrible track record of disaster.
There’s every political and professional incentive for the Fed to keep interest rates low. But when the Federal Reserve keeps rates too low, it sends a distorted signal to the economy. More money flows into housing and other assets. Prices rise. Then the distortions become obvious, and the correction comes. This is the boom-bust cycle. The 2008 crisis followed this pattern, low interest rates set after 9/11 continued throughout the era, distorting the economy, until eventually the music stopped in the game of musical chairs, and people were left without a house.
And worse still.
Ordinary families lost their homes while the institutions closest to the government were protected by the “Troubled Asset Relief Program.” As President George Bush said at the time, “I’ve abandoned free market principles to save the free market system.” What’s important to understand now is that the machine was never fixed. People blamed the banks that were bailed out, not the Congress that bailed them out; they blamed the homeowners who took on variable-rate mortgages, not the Federal Reserve that set interest rates too low. In fact, Dodd-Frank made it easier for Congress to bail out banks going forward by codifying too big to fail into law. Creating more moral hazards.
A Machine for Rulers, not the Ruled
A new Federal Reserve chairman was just sworn in after one of the most contentious confirmation fights in the Fed’s history. He may prove capable. He may not. It barely matters. They changed the person at the wheel. They did not change how the machine is wired or who it ultimately serves.
The national debt has surpassed $39 trillion. Interest payments now exceed the entire defense budget. A government that large cannot be funded by taxes without a revolt. So our federal government borrows, and the Fed creates the dollars to cover the shortfall. You pay the difference in the shrinking value of everything you earn and own.
Now the Fed has an even greater incentive than in 2008 to push for lower interest rates, because without them, we can’t fund our government. This federal debt financing means higher inflation.
And that is really a hidden tax. It does not appear on your return. It is one of the most regressive forces operating in American life, and it lands hardest on the people without assets to ride the inflation.
When in doubt, lie with statistics
What is concerning about the new Fed chair is that his comments might pave the way for much higher inflation ahead.
When the official numbers become inconvenient, the response is often to change the scorecard rather than the underlying reality. The new chairman argued during his confirmation hearings that inflation should be judged by a “trimmed“ measure — discarding the fastest-rising prices and reporting what remains. Run the numbers that way, and the rate drops from 3.8 percent to something that looks almost under control.
From your kitchen table, though, that is not looking through the noise. It is moving the goalposts.
The machine has a primary customer: the federal government. Our kitchen table reality doesn’t factor into their equations.
Americans are furious about prices and pessimistic about what rising prices mean. This spring, the University of Michigan’s Index of Consumer Sentiment hit 44.8 — the lowest reading since they began tracking it in 1952. 57% percent of Americans said high prices were wrecking their personal finances. Gas prices from the latest energy shock struck the match. But the tinder was already there: years of a dollar that’s been quietly losing its value.
The reflexive answer in Washington — from both parties — has been to reach for the same lever: cheaper money. Lower rates while inflation is still running near four percent. More easy credit chasing the same artificially constrained supply of homes.
Cheaper money is not the cure. It is the disease. It does not create more houses. It creates more dollars, bidding up the houses that already exist, while local and state governments prohibit building any more houses. It re-inflates the very bubble that wiped out a generation of homeowners in 2008.
It is the next drink offered to cure the hangover.
It’s policy, not natural order
Prosperity has never come from a printing press. It comes from making more of what people actually need — more homes, more energy, more of everything — while preserving a dollar that holds its value long enough for working families to save and plan. It comes from a stable currency, either through stable rules or market-based money. I’m pretty agnostic on the cure right now.
What’s clear is that the young couple at the edge of town does not need another lecture about patience. They need two things at once.
They need the right to build — the removal of the zoning maps, lot minimums, parking mandates, and review boards that make housing artificially scarce and expensive. That fight happens at city hall and in state legislatures. It is the core work of the Land Liberty Movement.
They also need a dollar that does not betray them while they save. They need the federal government to deliver fiscal (budgetary) and monetary (The Fed) reform.
Until enough of us understand how the machine actually works and demand something better, the house will keep running away — and they will keep telling you it is your fault for not running faster.
It is not. It never was.
The American Dream isn’t Dead; it’s being blocked by a monetary system designed to help the government, not you. We can unblock it by helping more people understand that the reason prices go up isn’t an act of nature, it’s an act done by a shadowy group of people who run our money systems.
I’m David Rand from the Land Liberty Movement. This is Build the Dream. Let’s rebuild the American Dream together — by restoring both the right to build and honest money that make saving worthwhile.
