I had a long visit a few days ago with a Republican congressman who assured me that even if the Republicans win back both the House and Senate in 2010, government spending will continue unabated. He agreed with me that, with few exceptions, Republicans lack the courage to vote against most spending bills.
But he also made another point that I thought was significant. While BHO and a handful of far-left congresspersons are driven by ideology and really do want to see the U.S. transformed into a socialist (and possibly a communist) state (apologies to Bill O’Reilly, who “doesn’t believe for a second that Barack Obama doesn’t have the best of intentions for his country”), most are simply ignorant.
That’s right, even though they are involved in government and economic issues every day, they simply do not have an in-depth understanding of what they are doing. It’s so easy to keep saying yes … Yes … YES to spending programs without worrying about how the bill will ultimately be paid.
What does this all mean? That the runaway inflation scenario I’ve been predicting for more than 30 years is now a certainty. The game is over. Our unfunded liabilities and debt now total twice the amount of wealth of all individuals and corporations in the U.S. And BHO and his socialist allies in Congress are just getting started!
The days of being able to borrow limitless sums of money will soon be behind us. And even the most ardent socialist knows that there’s a limit to how much you can increase taxes. If you raise taxes too much, the economy ultimately shuts down completely.
Thus, printing worthless dollars is the only “solution.” The practice of indiscriminately increasing the supply of money gives politicians the ability to have their cake and eat it too. They know that the surest way to be kicked out of office is to vote for cutting back on sacred-cow handouts like Social Security, Medicare and unemployment benefits.
To the rescue: Inflation! Inflation provides politicians with a way out. As most everyone serious enough to be reading this article knows, inflation is a hidden tax. By printing enough “money” to cover the remainder of each year’s deficit, politicians get off the hook, because they don’t have to vote for tax increases.
Once rampant inflation hits the U.S., people will see prices rising rapidly as a result of fiat-money creation, but most will have no understanding as to the cause. As a result, they will be all too willing to take up the government’s battle cry to “fight inflation.”
And how do you fight inflation? By pointing a guilty finger at all the wrong parties, of course – which brings about proletariat reactions like, “Gol’ darn it, Maude. Them thar big corporate guys is stealin’ us blind. That O’Reilly feller’s been right all along about them oil dudes makin’ obscene profits.”
When Congress accuses others of causing inflation, it’s tantamount to a bank robber shouting to a bunch of depositors, “The culprits went thataway! Let’s catch ‘em and string ‘em up!”
The truth of the matter is that for many years we have been experiencing what I would call an “invisible depression,” a depression camouflaged by easy credit. But it’s becoming harder and harder to hide the truth. As I said at the outset of this article, even if Republicans take back both houses of Congress in 2010, out-of-control spending is almost certain to continue.
Few if any politicians have the courage to allow market forces to prevail, because they know it would cause a deflationary depression much worse than that of the 1930s. Prices would plummet, and the living standards of most people would dramatically decrease. Which leaves an inflationary depression as the only option.
The problem is that in a runaway inflation scenario, commercial transactions become almost impossible to engage in, because people will not accept paper money in exchange for their goods and services. And because very few people understand the real cause of their personal financial problems, the move toward a dictatorship begins to look appealing to them. (Adolf Hitler’s rise to power is a charming little example of this.)
Someday, I might be tempted to write about some really depressing realities of our suicidal nation-state. Today, however, I’m in a good mood, so I think I’ll just leave it at that and end on a positive note: isn’t it great that you and I are alive? Hmmm … actually, let me think about that one. I don’t want to be accused of jumping to conclusions.