I'd like my hyperinflation with a side of dictatorship, please
I'm not quite sure why we bother with things like representative government anymore. The Senate voted against giving handouts to the car companies, largely because the auto workers' union refused to accept pay cuts as part of the deal. But 'thankfully' the unelected officials in the Treasury Department were on hand to give them our money anyway:
"Given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers," White House Press Secretary Dana Perino said in a statement.
(full story here)
Then there's this genius, who thinks that we should devalue the dollar (read: cause massive inflation - his suggestion is around 43% inflation, as a matter of fact) as a 'solution' to current economic problems. This amounts to just printing up a huge volume of cash and sending everyone in the country a massive check.
Which brings us to the real question: since the Federal Reserve has a monopoly on printing money, and there are no longer any restrictions on how much money they can print, why don't they just print everyone in the country a billion dollar check, and we'll all be able to retire?
The reason is this: when you increase the supply of money, you also raise prices - that's the source of inflation. All else being equal, if you double the total supply of money in the economy, you'll double prices (and wages, too, but wages never rise as fast as prices do). So you end up back where you started, except that each unit of your currency is now worth half as much as it was before. It's basic supply and demand at work, and it's something you can't avoid. You can (and they do) try all sorts of fancy tricks to delay the effects, but you can't ever stop them from happening, in the end.
Which is the simple version of the argument for why we should get rid of the Federal Reserve system: since the constantly rising prices caused by inflation are really reflections of increases in the supply of money, and the Fed is the ONLY party who can increase the supply of money, then they are the sole source of inflation - they create it, through their actions. They do this because it benefits them and their favored bankers, since the newly created money goes to them first - they get to spend that money before the devaluation occurs. Those of us at the 'far end of the economic chain' see prices rising and wages staying the same. It's a hidden tax on the poor and middle class, and one that goes mainly into the pockets of wealthy bankers.
"Given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of troubled automakers," White House Press Secretary Dana Perino said in a statement.
(full story here)
Then there's this genius, who thinks that we should devalue the dollar (read: cause massive inflation - his suggestion is around 43% inflation, as a matter of fact) as a 'solution' to current economic problems. This amounts to just printing up a huge volume of cash and sending everyone in the country a massive check.
Which brings us to the real question: since the Federal Reserve has a monopoly on printing money, and there are no longer any restrictions on how much money they can print, why don't they just print everyone in the country a billion dollar check, and we'll all be able to retire?
The reason is this: when you increase the supply of money, you also raise prices - that's the source of inflation. All else being equal, if you double the total supply of money in the economy, you'll double prices (and wages, too, but wages never rise as fast as prices do). So you end up back where you started, except that each unit of your currency is now worth half as much as it was before. It's basic supply and demand at work, and it's something you can't avoid. You can (and they do) try all sorts of fancy tricks to delay the effects, but you can't ever stop them from happening, in the end.
Which is the simple version of the argument for why we should get rid of the Federal Reserve system: since the constantly rising prices caused by inflation are really reflections of increases in the supply of money, and the Fed is the ONLY party who can increase the supply of money, then they are the sole source of inflation - they create it, through their actions. They do this because it benefits them and their favored bankers, since the newly created money goes to them first - they get to spend that money before the devaluation occurs. Those of us at the 'far end of the economic chain' see prices rising and wages staying the same. It's a hidden tax on the poor and middle class, and one that goes mainly into the pockets of wealthy bankers.