Honorable mention goes to The Mogambo Guru for “Inflation: The Economic Factor that Never Stops” :Beyond the question of “how” the spending could be achieved, is the deeper question of “why” such activity should be sought at all. Excessive spending, fueled by an insane housing bubble and catalyzed by reckless monetary and fiscal policy, was the reason that our current recession became unavoidable. Why would we want to go down that road again?
During the run up to the crash, excess spending had created economic distortions that have yet to be resolved. Too many resources, including land, labor, and capital, were devoted to servicing an unsustainable economic model in which Americans borrowed money to buy homes, products and services they really could not afford. In many cases consumer behavior was influenced by overly optimistic assumptions regarding real estate related riches.
However, now that the real estate bubble has burst, Americans are coming to terms with a more sober reality. Many have cut up their credit cards, dramatically reduced their spending, and have squirreled away as much money as they can. This change in behavior should necessitate a dramatic shift in the labor market as workers move away from jobs associated with consumer spending and toward jobs associated with real production, primarily for exportable goods.
The real problem is that monetary and fiscal policy designed to re-inflate the burst spending bubble is preventing this transition from taking place. As a result we are not creating the jobs we need to replace – the ones we have lost in mortgage servicing, home improvement, and real estate sales (which we never really needed to begin with). As these jobless remain unable to find alternative employment, our economy will continue to languish.
That ought to shut her up pretty good, I figure, and if not, then I’ll scream at her until she confesses that she did not consider that the government now uses Hedonic Measurements of inflation, such as how that the turkey she is jamming into her pie-hole used to start getting stale and dried-out after a week or so in the refrigerator. But now, perhaps with the addition of small amounts of preservatives as part of a secret government experiment involving adding tiny little bits of nuclear waste during processing to produce enough radioactivity to kill all organisms that touch it, the leftover turkey will be just as tender and delicious a year from now as it is today!
Maybe even glowing, so you can make a sandwich in the dark!
This increased shelf life of the cooked turkey obviously increases the value of the turkey tremendously, and it also helps to deplete the nation’s nagging problem of its stockpile of dangerous, clumsy and expensive-to-store nuclear waste, producing a double benefit! Double!
Thus, the government calculates that the new, extra benefits of having turkey available for consumption for more days of the year (which is not a problem for my sister since she seems to be eager to eat lots of food, and she’ll probably finish the turkey carcass off pretty quick!), and simultaneously achieving a profound social good of disposing of dangerous radioactive waste, means that the turkey can never go up in price! Only the rising price of the new benefits makes it LOOK like it, because it costs more dollars per pound! Hahaha!
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As I said, inflation is the only thing that makes sense when considering such unbelievable, incomprehensibly massive increases in government borrowing-and-spending, overshadowed only by the enormous increases of money created by the Federal Reserve, and which makes sense since every doofus is town is yammering about how “inflation is impossible” and how “deflation is the bigger problem” since deflation means that the over-indebted middle class, the over-leveraged rich, the bloated financial services industry and the socialist government would lose, while inflation would affect mostly the poor, which are always the ultimate victim.
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