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2010-04-10 Economy

Pray For Inflation -- It's Our Only Hope

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Posted by BrerRabbit 2010-04-10 08:03|| E-Mail|| Front Page|| [1757 views ] Top

1 That dog won't hunt. Inflation just gives the scoundrels a lifeline to keep spending money in factors greater than they have or can get. What they are planning to do is to hyperinflate the dollar, then re-denominate it, striking a bunch of zeroes off the end. Then hyperinflate some more. Then re-denominate, etc.

This sucks the life out of an economy like a vampire.

Right now, tax revenues are about 2 trillion dollars a year, from a height of about 2.8 trillion before the last downturn. However, the government has a national debt of $14.5 trillion, and on top of that, has already promised in excess of $150 trillion.

This means that even with *compounded* inflation of 100% (assuming 2.5T revenues average), and NO more excessive spending, it would still take seven years to pay off all their debt and promises. That is, all that debt and promises would only be paid off to the value of $2.5T

The dollar would be worthless. But of course, it would not stop their insane spending spree. By then, they would be spending and promising to spend in the quadrillions, or even quintillions of hyperinflated dollars.

The only way to stop this madness is to get control over Washington's spending. To stop the hemorrhaging of dollars and debt.

And like a gutter junkie prostitute, Washington cannot stop itself, so it has to be stopped by the States, most of whom are confronting reality right now.

Posted by Anonymoose 2010-04-10 09:20|| 2010-04-10 09:20|| Front Page Top

2 Washington cannot stop itself, so it has to be stopped by the States, most of whom are confronting reality right now.

Curious is it not, many of the same "States" that through confederation and secession, attempted to stop the federal government the last time.

Posted by Besoeker 2010-04-10 09:31|| 2010-04-10 09:31|| Front Page Top

3 This time around they're not looking towards secession and they have the Constitutional means alter the system if they motivate 38 states to make it so. The more they mandate in the Beltway in effect make the states simply another layer/department of the central government, the sooner the states will realize that they must act or disappear. There's a lot of administrative savings in doing away with redundant governmental units and bureaucracies that they'll become.

Posted by Procopius2k 2010-04-10 10:59|| 2010-04-10 10:59|| Front Page Top

4 With increased GDP and inflation, yes it would work like the article says.

One minor problem.

GDP is still shrinking.

You get inflation with GDP shrinking or flat-lining.... you get deflation. Definitely NOT what the government is looking for. If the feds are looking to inflate their way out of their self inflicted mess.... they will fail. And bring down the Union with them.

Posted by DarthVader 2010-04-10 16:54|| 2010-04-10 16:54|| Front Page Top

5 Hey, it worked in Weimar Germany. Oh, wait ...

Posted by DMFD 2010-04-10 19:14|| 2010-04-10 19:14|| Front Page Top

6 The headline is wrong. It should be,

Pray For Inflation -- It's The Government's Only Hope

Inflation transfers income and wealth from individuals to the government.

Deflation does the reverse (relatively speaking). Which is why governments are terrified of deflation. It transfers wealth and income to individuals. Just look at Japan over the last 20 years.

Posted by phil_B 2010-04-10 21:01|| 2010-04-10 21:01|| Front Page Top

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