I have a group of fans that are die-hard liberals. They find all the liberal talking points and shout them at me in the comments to my posts, as if I were completely unaware that there is a group of liberals trying to shout down their opponents with talking points.
Regardless, I appreciate them. The more time the spend whining to me, the less they call into my favorite talk shows and interrupt my listening pleasures. Plus, it shows that my forum is more powerful than the liberal ones.
One of the liberals is absolutely, positively convinced that the normal laws of finances do NOT apply to the government. That is, you don’t need to bring in more than you spend, you don’t need to balance your budget, and you don’t need to worry about debts and interest rates and all those sorts of things “regular” households and businesses have to worry about. Government simply doesn’t need to concern itself with these mundane affairs mere mortals have to deal with daily.
The idea is that since government can print money, they can spend as much as they want! Hooray! It’s Christmas every day! Here’s a pony for every little girl in the world! And free health care! See? All we had to do was BELIEVE and USE OUR IMAGINATION! Look there’s a unicorn!
This is, of course, absurd.
We have a recent example of a government that tried to print its way to prosperity: Zimbabwe. We have a more obvious example: The Weimar Republic, the predecessor to Nazi Germany. These are only two examples from history. There are countless more. And if you expand your definition of money, you will find inflation happening in every industry where the supply of a good rapidly increases beyond the needs of demand.
I’d like to approach this a different way. See, families and businesses have the same power as the government to print little pieces of paper. They can even write dollar signs on them, and color them green and put drawings of important people from history. (OF course, forgery is a crime since it is lying and a fraud. But you can create your own designs.)
The line of business I’m in, internet advertising, is just such an industry. I can take people’s web content and put it in many different places. But that doesn’t mean they’re willing to exchange little green bits of paper, US Dollars, for my services. No, they are interested in things like “ROI” and “effectiveness.” Apparently, they suffer from a critical disease called “reality”, where they want to get more out of what they spend than what they paid. What I have to do is CREATE value for the services I provide, my money. Then I can exchange these services for something of lesser value to them, but of greater value for me.
Did you know I actually spend almost 100% of my time thinking about how I can increase the value of advertising based on where and when I show it? The same ad in two different places has different value. Interesting how that works. Money is the same kind of thing.
See, bartering NEVER ENDED. We are still bartering today, even though almost all of the transactions we engage in involve dollars or promises of dollars. It is only because we value dollars that dollars have value. The same is true for gold and silver. These are all really “fiat” money, meaning money that is money because people believe in it. (Could an Atheist society have money if they reject the idea of belief altogether? News at 11.)
The Federal Government CANNOT simply print money. Or rather, they CAN, they just can’t print WEALTH. That is, if congress passed a bill, and President Obama signed it, granting the US mint to print a QUADRILLION dollars — a thousand trillion, $1,000,000,000,000,000.00—they could NOT use this to purchase a quadrillion dollars worth of things. What would immediately happen is everyone would whine about the super-inflation that would hit the US. Money would fall to a fraction of its value. Bubble gum would cost $1,000. Cars would cost hundreds of millions. Homes would be worth billions. And people’s wages would of necessity raise to compensate. I’d probably make that million I’ve always been working towards — in a few months. Medicare and Social Security recipients would be literally left on the streets, since their checks wouldn’t even be enough to buy a drop of water.
It”s funny that the very method my political opponents suggest as the path to prosperity would ACTUALLY ACHIEVE what they claim I want to achieve. That is, you’d really kick the poor and the sick and the old into the street if hyper-inflation ever occurred.
We tried this, by the way, in the 70′s. It really, really sucked. We tried to peg prices as well. That was even worse. Ask someone who was an adult in the 70′s, ask them what it was like to get gasoline.
That lead to Reagan’s landslide victory, and his executive order to put the US mint on vacation until inflation stopped.
Odd how that works, right?