This is the Cato Daily Podcast for Friday, March 29th, 2013. I'm Caleb Brown. A large-scale

seizure of bank assets in Cyprus appears to have been averted with a looming uncertainty

and controls on how bank depositors may access those funds can't mean good things for depositors.

Cato Institute Senior Fellow Richard Ron says that kind of seizure of wealth

and the creation of government fostered uncertainty while galling isn't

unprecedented even in the United States. We sort of recoil at the idea of having

our bank deposits just swiped because of government mismanagement over some time period.

But is it really any different than just raising taxes on people?

No. The thing you're concerned with is how much money do you have left after taxes and inflation?

And right now now most Americans are getting less than 1% on their saving and money market

accounts.

Inflation is running more than 2% and people are taxed on this imaginary interest they receive

when they've actually had a capital loss.

In other words, government is expropriating the capital they have, your savings, and taxing you

on it.

But that's nothing new.

I mean, that's the nature of inflation, right?

Well, no, this is not so much inflation as the Federal Reserve is holding interest rates down to an

artificially low level. Normally you expect the real interest rate above the rate of inflation to be about 3%. So let's say

we've got 2% inflation so you'd expect to get about 5% on your savings. That would be

normal. The Federal Reserve is holding down interest rates artificially,

which penalizes all savers. It basically again is expropriating their capital.

...