Stupid, irresponsible U.S. Government

      In response to the economic crash resulting from the coronavirus pandemic, President Trump and the U.S. Government have just passed a $2 Trillion "stimulus" package.  And there are hints afloat that this may be just the first of multiple such packages coming down the pipe.

      This is an utterly stupid, reckless, irresponsible act.  Granted, the coronavirus is wrecking economies all over the world.  But let's put the blame where the blame belongs:  an invisible medical enemy.  Government neither caused it nor can cure it (notwithstanding the Chinese government following the Soviet Union's lead from the Chernobyl disaster: hide it and jail the messengers). 

      So in essence, the U.S. Government has fired up the printing presses and counterfeited $2 Trillion dollars worth of green pieces of paper bearing picture of dead presidents.  (I know - those of you who have studied economics understand that that is not exactly how the system works, but technical details aside, it's still the same darn thing.)

      Reality check:  you cannot create wealth by printing off paper dollars.  Or inflating the money supply via the Federal Reserve, which is, again, the same thing.  WEALTH is only created when people and businesses produce the goods and services that consumers want and need.  Cranking out currency is NOT creating wealth!

      Prior to the coronavirus crash, the U.S. Government was already spending a $Trillion a year more than it took in in revenues.  We are looking at a situation whereby, very shortly, tax revenues will cover less than HALF of federal spending.  And that's just the short term.  I, your favorite blogger, predict that, possibly before the end of the year, that tax revenues will cover less than a quarter of the budget.

      Deficit spending is an incredibly lucrative scam.  If you are a politician or bureaucrat and you want to be popular with the citizenry, then deficit spending is best tool there is, because it allows you give away government freebies for "free".  But it ain't "free".  EVERY dime the government spends must come from someplace.  The first stimulus package will put the budget to about $6 Trillion.  Divided into a population of 325 million, that's over $18 THOUSAND a year for every man, woman, and child.  If it's not covered by taxation, then we citizens STILL pay for it all.  It may not be as obvious as taxation, but you still pay. 

      Given that the government clearly doesn't give a damn about balanced budgets, I've always wondered why they don't just simply get rid of the whole taxation thing completely and simply pay for ALL government spending via deficits?

      What's especially galling is the fact that this entire "stimulus" charade is being promoted and supported by Republicans.  Is there any shred of doubt left that the Republicans, the so-called party of "limited, responsible government" is nothing but a band a charlatans, liars, and con-men?  The Democrats, to their eternal credit, are at least honest about their intentions.  They come right out and say that they support Big Government as The Solution To All Problems, and by golly, they deliver!  The Republicans are nothing but phonies and frauds, to the core.

      So what will be the likely and tangible result of all this reckless, irresponsible government deficit spending? 

buying a loaf of bread

      Inflation.  Wild, crazy inflation.  It's called "hyper-inflation", and yes, it's happened many times throughout human history, in many different places where governments have tried the same failed gimmick.  People start to lose confidence in those government-printed paper dollars, and next thing you know, you need a barrel-full of them to buy a loaf of bread.  But that was just today; tomorrow, you'll need TWO barrel-fulls.  And so on.

      I have some personal experience here.  I was in Hungary a few years ago, and I exchanged a $20 US dollar bill for the local currency.  The cashier handed me this HUGE pile of bills, most of them bearing numbers with lots and lots of zeros.  Then we went to a MacDonald's restaurant.  There, a Big Mac costed like 600,000 of them.  It took me a while to dig a pile of money out of my pocket and pay for it.

      How is it that governments get away with these crazy shenanigans?  Well, it's easy when you give the government control over money.  Government is not some super-human deity who can always be trusted to be honest and responsible.  You give government the power to print money, and then pass laws saying that ONLY these government-issued pieces of paper can be used to pay for transactions, and government will certainly, absolutely, positively abuse that power.

      What is the solution?  Well, the short-term remedy is to re-boot our thinking and realize that the government is going 180 degrees in the WRONG DIRECTION.  Now, especially when there is a national crisis, it is time to drastically REDUCE government spending.  I know, nobody want to see their favorite governmental special-interest programs cut, but this is a CRISIS, by golly, and everyone must sacrifice, even the politicians and bureaucrats.  Thus it is imperative, during these trying times, that government spending be cut at least 50%, preferably 75%, or better yet, about 90%.  The country prospered not that long ago, actually, when government spending was a fraction of what it is now.  Plug your ears to the whiners and complainers and insist that government do the right thing this time!

      But for a more workable, permanent remedy, we need to abolish these "legal tender" laws that prohibit using other forms of currency.  Let's truly abide by the concept of "liberty", and allow Americans to buy and sell using any form of currency they choose.  It may be French francs, or Chinese renminbi, or Mexican pesos, or gold, or silver, or bitcoin, or MacDonald's gift certificates, or perhaps some currency issued by a bank, or even United States Federal Reserve dollars, if that is what the people choose.  The most stable, most trustworthy, most reliable form of currency will become that used the most.  When it comes to economics, competition is always a good thing.  May the best currency win!   

      Till that is changed, get ready for some serious inflation.  Remember: you read it here first!