But even if the stimulus is a magnificent success, the money still has to be paid back. The plan of record apparently is that we keep borrowing, spending and stimulating, faster and faster, until suddenly, on some signal from heaven or Timothy Geithner, we all stop spending and start saving in recordbreaking amounts. Oh sure, that will work.That's the plan, Mikey. That's the whole plan.
There is another way. If it's not the actual, secret plan, it will be an overwhelming temptation: Don't pay the money back ... (The whispered plan is) the gradual default known as inflation. Just three or four years of currency erosion at, say, 10 percent a year would slice the real value of our debt -- public and private, U.S. bonds and jumbo mortgages -- in half.
... Among other problems, inflation works only as a surprise or betrayal. It can never be part of any public, official plan. Plan for 10 percent inflation, and you'll get 20. Plan for 20 and you'll need a wheelbarrow to pay for your morning Starbucks. But if that's not the plan, what is?
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Friday, February 20, 2009
One of the Lefties Starts to get It
Michael Kinsley, longtime writer for The New Republic, a lefty magazine, had a great article in the Washington Post today. Here's a tidbit.
Errands for today:
ReplyDelete-Groceries: milk, eggs, cereal
-Drop off package at post office
-Buy wheelbarrow!!!
Nah, you won't need a wheelbarrow, it will all be done with debit and credit cards.
ReplyDeleteCome to think of it, a credit card would be a great thing to have in a hyperinflationary period: buy today, and pay off the credit card in a month with considerably-devalued future money!
I suspect that, for this reason, hyperinflation would absolutely *destroy* the credit-card business.