The Great Inflation

Discussion in 'Politics' started by jreeves, Jun 7, 2009.

  1. jreeves
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    jreeves Senior Member

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    FSU Editorial: "The Great Inflation, 2010-2012" by Robert Ross 08/01/2007

    "Everyone loves an early inflation. The effects at the beginning of inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular prosperity, all in the midst of temporary stable prices. Everyone benefits, and no one pays. That is the early part of the cycle."
    - Dying of Money by Jens Parssons

    He looked away, as though trying to choose his words in a way that would be understood. "In 1971, Richard Nixon took us off the gold standard. Up until that point in American history, the dollar was essentially backed by gold." "Why gold?" a student blurted out. "Well, gold has been considered money for 5000 years. Gold is hard to find and in short supply. But the thing with gold was, and is, . . . it's a restraint." He paused for a moment, and repeated the word slowly . . . "restraint." He looked around the room. Did they get it? he thought to himself.

    "Well, what went wrong after that? a student quipped. "Nothing went wrong immediately, but rather, it was the beginning of a slow creeping inflation. A car that cost $3000 in 1971, would cost $7000 in 1980, $14,000 in 1990, $18,000 in the year 2000. Everything was going up in price, medical, housing, food and gas. The national debt grew dramatically too, from a manageable figure in 1970 to one trillion dollars in 1980, three trillion in 1990, and six trillion in 2000. By the end of 2007, the debt was nine trillion dollars and growing."

    "Why was the government spending so much money?" Another student asked. "Without any restraints, it was easy. Just print it and put it out into the system. With this new found freedom, the government found itself taking on new responsibilities and creating new dependencies. Entitlements like the Drug Prescription program and Medicare grew without restraints. By the year 2009 the government had nationalized health care. By 2010 the baby boomers were retiring in droves, putting enormous strains on Social Security and Medicare. And by this time, most public institutions were in some way dependent on the federal government for their financial well being."

    The Federal government borrowed trillions of dollars, adding to the national debt. The system was flooded with money to supposedly create jobs. The printing presses were running nonstop. It was during this period that the public finally became aware of the fact that the dollar was just paper - backed by nothing. Prices skyrocketed due to excessive demand and short supplies. The value of the dollar plummeted, devastating the middle class. People spent their money as fast as they could, knowing that prices would go up the following day.

    The instructor looked out slowly, studying the faces. He calculated their ages and approximate life spans. "If you'll look at history, if you'll look at human nature, and you look at politicians, without a currency that's backed by something, something that restrains spending, then this inflationary cycle will happen again, and again, and again." He paused for a moment, and said slowly "It will happen again in your lifetime."
    "As the government grew in size, many citizens willingly abdicated their personal responsibilities. All of life's problems, over time, became the government's fault and responsibility to fix. Full employment was the government's responsibility. The high cost of medicine, gasoline, and food was the government's fault. Everyone looked to Washington to solve their problems. Politicians were elected because of economic promises made to their constituents. And, the politicians were more than happy to take on these responsibilities. After all, their job was to spend money, money created without restraint, by printing presses." The instructor paused for a moment, a long moment, creating a certain anticipation. "You could say, at the time, he paused again, "I was in charge of the printing presses." The classroom fell silent. Finally, one student out of discomfort with the lack of sound, asked "do you think you are . . . are responsible?" The instructor didn't hesitate, "Absolutely not! I gave the American people what they wanted, what they had grown to expect." "What was that?" the same student asked? "An economy created and managed by Washington . . . a false utopian economy" the instructor fired back.

    I found this article pretty prophetic what do you think?
     
  2. waltky
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    waltky Wise ol' monkey Supporting Member

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    Granny saves money on clothes by shoppin' at the Goodwill an' DAV stores...
    :tongue:
    Clothing Prices to Rise 10 Percent Starting in Spring
    Monday, February 14, 2011 - The era of falling clothing prices is ending.
     
  3. B. Kidd
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    B. Kidd Gold Member

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    I've found practically new cargo shorts at the Goodwill and Salvation Army thrift stores here in Yuma for $3. Haven't bought shorts new retail for the last 3 years.
     

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