Inflation - Where Reality Impacts Rhetoric
Inflation - Where Reality Impacts Rhetoric.
Author’s Note: As a currently out-of-work economic refugee, this article seemed to me to be a lot funnier when originally conceived. Like Obama’s mis-handling of the economy, It turned out to be something more serious.
With the economy still shedding hundreds of thousands of jobs each month, the Obama administration revealed new plans to stop the slide in unemployment by accelerating the pace of government Stimulus spending. As with most Democrat economic initiatives, this will only make matters worse.
Obama’s promise to create or save jobs was a centerpiece of his Stimulus promises. Of course since no one can prove how many jobs were saved, the proclamation was received by CNN as a statement of political brilliance – even if economically insane. Several trillion dollars to save a couple hundred thousand jobs seems a tad expensive even to Anderson Cooper.
Economists and other notables including Fed Chairman Ben Bernanke have warned repeatedly about the dangers of federal government overspending. But, as they now find themselves with custody of the taxpayer’s American Express Card with an unlimited credit line, Democrats are preparing themselves for the biggest trip ever to the world’s liquor store. They will make themselves drunk on spending and will soon find themselves incapable of repaying - at least within the expected lifespan of current citizens – the debt. That will be a task for future generations of Republicans to figure out. For now, the spending party is on.
The inevitable consequence of paying for government spending with newly printed money is of course inflation. Obama has few options other than printing money to cover Stimulus obligations. The Chinese and Saudis are concerned for inflation as well. Should these nations invest in US debt instruments in an inflationary market, the value of their investments may well decline. Only Democrats seem interested in investing in a proposition where there exists a strong likelihood of loss.
Members of the Obama administration that understand where the US economic train is headed have come up with several reasons for not applying the brakes. Inflation has some great short term advantages and short term advantages are what Democrats are all about. The crack staff at Treasury have been working with Rahm Emanuel’s White House staff to come up with these top ten reasons for launching rapid inflation.
10. Union workers will receive significant benefits – Taxpayer-funded annual union raises as well as UAW “luxury” retirement payments will continue until 2012. Included in most union contracts are guarantees for covering cost of living increases, so union workers will be getting regular and significant raises at least until the 2012 elections. It really doesn’t matter to them who pays.
9. Businesses will need to hire accountants and financial planners to calibrate future industry pricing models – to improve performance, businesses will need to fully understand how to keep up with rising costs of supply and formulate plans to pass those costs onto consumers without alienating customers. This will create high need for business analysts with psychology degrees and degrees in fortune telling. This will in turn lower the unemployment rate.
8. Helps in funding takeover of Health Care – Borrowing and spending now at favorable interest rates looks better to taxpayers when compared with total costs down the road in an inflationary market. Obama’s plan to ruin American Health Care requires significant federal investment that appears cheaper if done now. This is the same line of reasoning used by one’s teenage daughter to justify spending $100 on a pair of shoes based on the belief they will be more expensive tomorrow.
7. Makes bailing out the California state budget more palatable – Key to Obama’s re-election plans in 2012 is capturing California’s electoral votes. With the most grossly mismanaged state budget in the union , California has no way to pay its bills and fund its social commitments to illegal aliens. Bailing out the Golden State with – say $500 billion will seem to taxpayers to be a good deal compared to spending a trillion dollars later. (It just won’t occur to federal level Democrats to just say ‘no’ to bailing out CA.) It will also buy the votes of a good many Californians in 2012. The Governator may have to terminate his mushy middle-of-the-road brand of ‘conservatism’ and start cutting ridiculous social spending if he is to avoid passing the entire problem off to the next Guv.
6. Support purchasing a GM car – The best selling ‘car’ in America is the Cozy Coupe built by the Little Tykes Co. of Hudson, OH. This car is powered by toddler feet pushing the plastic car along. Similar to the Flint Mobile of Flintstones fame, future GM cars will need to be powered this way as well. Additionally, purchasers will have to fork over significant sums of money to get one. Convincing consumers to pay $50K or $60K for a new, two-cylinder aluminum ‘Cozy Coupe’ for adults will be more than a challenge for Government Motors. For consumers, coming up with $50k now will seem like a good deal compared to paying $80k in 2011. Obama is grasping at any straw to make purchase of a GM automobile appear to be a decent investment.
5. Everyone will be a millionaire – All workers could be earning the same as Oprah. Wage inflation always accompanies product cost inflation although at a lagging pace. Team Obama wants all Americans to feel like a rock star with a Britney Spears variety expense budget. Under inflation, that much cash will only buy a couple of grocery trips for the family, but the large salaries required to support those grocery trips will be something Team Obama can point to in 2012 as an accomplishment. Besides, higher incomes are taxed at higher rates - which is even better for bringing in revenue.
4. Stop printing of paper money –and/ or.. quit minting coins –This will assist in Team Obama’s drive to have wealth transfers done electronically – especially to the IRS. This would also allow more careful scrutiny of individual records by IRS hackers. (interestingly, hackers currently employed by the federal terrorist task force will be re-assigned to work for the IRS investigating ‘right wing’ US citizens financial records.) Besides cost savings this will also decrease inconvenient historical references to George Washington, Abraham Lincoln, Ben Franklin or other currently irrelevant historical figures.
3. Assist in creating a government credit card – Why should Visa and American Express have all the business? The pace of inflation will require such large sums to pay for common items that will be much easier to track all economic activity electronically. Team Obama intends to charge a few user fees here and there to cover the cost of operating the Government credit card program, but will have instant access to taxpayers for payment of whatever tax du jour arises. Monitoring purchasing activity will also provide information into behavior deemed anti-American by the politically correct – behavior like purchasing a firearm.
2. Solving the home equity problem – Many homeowners got turned ‘upside-down’ during the recent price-collapse in the Real Estate market. Those that have seen any equity eaten up by declining property values are of course interested in pumping up the equity side of their house investment without incurring additional loan debt. Inflation will drive up the price of homes and if consumers were smart enough to lock in a low interest rate, they will see their equity ownership portion bounce back as a result of inflation.
1. Hiding the HUGE tax increase that CNN won’t understand – Democrats have always been sensitive to accusations of being the party that increases taxes. They are sensitive to this because it is frequently true. However, inflation is the method by which taxes may be increased without the understanding of most voters that they have again had their savings looted by the Democrat party. Paying for government programs via taxation is clearly understood by the wiz kids running CNN. Paying for government programs through inflation is something that they just won’t get. And because of media unwillingness to explain inflation to voters, Team Obama will simply repeat the tired old message that they have ‘cut taxes’ for those in middle income bracket. Anderson Cooper will just nod his head and make another lame joke about ‘teabagging.’