grimmeissen
Administrator
Join Date: 1/14/2004
Posts: 1217
|
|
|
Posted: 1/21/2008 10:56:19 AM
|
|
|
According to the American Heritage Dictionary, the definition of "inflation" is:
Quote: A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
Many economists and educators will lead you to believe that inflation is just a general rise in prices, caused by companies looking to make extra profits or by demand that far exceeds supply. In reality, for the vast majority of cases that we see in our every day lives, inflation is entirely a monetary phenomenon.
Congress is finally waking up to the fact that the housing bubble is collapsing and is dragging the entire economy into a recession. They have placed the blame on high oil prices, poor lending policies at banks, high raw material costs, and the inability of the American consumer to keep up. Based on this reasoning, it seems pretty clear that the current recession is being driven by the inflation in oil, food, housing, and other core areas for maintaining our living standards.
So with the definition of inflation covered and the understanding that it has been a major driver to the current downturn, let's take a look at the recent proposals that have been presented to fight inflation. Hillary Clinton has advocated writing $500 checks to every citizen, George W. Bush is calling for Congress to enact immediate tax rebates, and Federal Reserve Chairman Ben Bernanke has asked Congress to provide an economic stimulus package and appears to be ready to lower interest rates. For the Clinton/Bush proposals, this amounts to a few hundred extra dollars being given to each person in the hopes that they will immediately spend it and thus will miraculously revive a shrinking economy. As for the stimulus package, this is basically like taking a helicopter full of money and dumping it to businesses, home owners, and credit card users who have not managed their finances wisely.
What do these packages sound like to you? It sounds to me like an increase in the money supply and an increase in available credit (by lowering interest rates). It looks an aweful lot like the definition of inflation.
So our government and economic leaders, in their infinite wisdom, have decided that the key weapon in fighting an inflationary recession is...
MORE INFLATION!
|
|
mccracken
VIP Member
Join Date: 1/16/2004
Posts: 262
Location: USA
|
|
|
Posted: 1/30/2008 12:45:06 PM
|
|
|
The best part about it is I think it's also going to people who didn't pay taxes.
Check it out.. check it out... and then pick it out....... Then show me my dinero!!!
|
|
grimmeissen
Administrator
Join Date: 1/14/2004
Posts: 1217
|
|
|
Posted: 1/30/2008 2:44:05 PM
|
|
|
You are right that the lower-income people who will be getting checks did not pay taxes, but they did have money taken out of their paychecks for Social Security.
In the end, the idea that throwing money at people will save the economy is completely ridiculous.
The smart money will just pocket the extra cash or will use it to pay off some of their heavy debt load. The ones who do spend it will just help create some more extra inflation that we don't need.
|
|