From “The Daily Reckoning.com”
The sitting administration — the Biden administration — sobs about inflation.
It claims it labors… heart and soul… to reduce that inflation.
Yet we believe these tears are the crocodile’s tears. That is, these tears are not authentic.
We believe the administration is not heart and soul to reduce inflation.
The administration is rather heart and soul for inflation. Not hyperinflation, mind you — hyperinflation carries severe political risk.
But it is out for inflation. It simply does not want you to know it.
That is because a government that likes to spend money cannot be against inflation.
Can a man who munches donuts and guzzles Coca-Cola all the day long be against fat?
Inflation Is Part of the Plan
Real Clear Politics:
From day one, the Biden administration has flooded the economy with borrowed money in the form of transfer payments, subsidies and grants designed to purchase the political support of favored constituencies such as those in the green tech sector. At the same time, Biden-controlled federal agencies have unleashed a tidal wave of crushing regulation designed to reduce the productive capacity of disfavored constituencies such as the oil and gas industry. The inflation that afflicts us was inevitable.
President Biden has asserted that fighting inflation is the “top economic priority” of his administration. Such a statement would be laughable if the subject matter was not so serious. This president has no intention of altering the policies that define and drive the progressive agenda. There is no war on inflation or, indeed, any serious attempt to bring it under control and stabilize prices. Inflation is baked into the progressive model of government that depends on the continuing disbursement of borrowed money to political supporters.
This is not a partisan publication. And we concede the preceding administration liked to spend money too.
The 2020 plague was its central justification.
Yet the present administration has multiplied and multiplied the fiscal obscenity.
It nonetheless proceeds to moan about persisting inflation.
Again: These are the tears of the crocodilian creature.
Inflation Favors Debtors
The United States national debt runs to $34.7 trillion.
Combined United States debt — public and private — crosses $100 trillion.
Inflation lifts debt’s burden. It reduces the iron in the chains that stretch across the shoulders.
That is why a government sunk in debt is out for inflation. It is a central must.
Explains Jim Rickards:
The national debt is $34.7 trillion. A $34.7 trillion debt would not be a serious issue if we had a $50 trillion economy.
But we don’t have a $50 trillion economy. We have about a $25 trillion economy, which means our debt is 50% bigger than our economy…
The debt is unmanageable without inflation. Inflation favors debtors because they get to pay back the debt with depreciating dollars. It’s easier to pay down debt because you’re paying back debt with dollars that are less valuable than when you originally borrowed them. So inflation eases the real value of debt.
On the other hand, deflation increases the real value of debt. With deflation, the value of money increases, making it more burdensome to pay off debt. This is why debtors hate deflation.
“America — We’re Tired of Being Played for Suckers!”
The administration simply cannot concede it. With one hand it dazzles you with its tricks.
“Look how we’ve expanded the gross domestic product,” it gloats.
“Look at the invisible unemployment rate,” it bellows.
Yet with the second hand it invades your wallet — in the expectation that you will not notice the invasion.
The United States dollar has shrunk 19% since the sitting president, Biden, swore his oath.
That is, the dollar in your wallet has shrunk 19%.
How do you like it?
Worse: Government will stare you in the eye and beam you a smile while it raids your wallet.
It will simultaneously direct your attention in another direction.
The president points toward “corporate greed.” Inflation is their fault, he tells you — not his.
Thus he howls:
“[There are] still too many corporations in America ripping people off. Price gouging, junk fees, greedflation, shrinkflation.”
He continues:
“America — we’re tired of being played for suckers!”
Indeed we are, Mr. President.
Yet you and the government over which you preside are doing the suckering.
The Silent Tax
“Inflation is always and everywhere a monetary phenomenon,” said the famed Milton Friedman.
Corporations do not dictate monetary settings. Governments do.
Can Mr. Biden’s described villainies transpire in a world of stable money?
They cannot. The price of x may jump, it is true. Yet the price of y would not.
And the ruthless agents of market competition yield generally price deflation across time.
That is not the condition that presently obtains.
We instead endure an encompassing inflation that spans the economic space.
You must recall that inflation is a supremely skillful pickpocket. It is justly and aptly named the invisible tax.
It is a cat burglar on tiptoe.
The abovesaid Milton Friedman once labeled inflation the “cruelest tax.”
We might label inflation the scoundrel’s tax. And what is government but a gang of scoundrels?
Is this justice? The liver and lights within us say it is not justice. It is injustice.
Yet only through such swindle can the United States government swell to present dimensions.
The Biggest Government in History
Never has a national government — of any nation of Earth — exceeded its obesity.
We do not stretch or distort the facts.
Mr. Michael Snyder of The Economic Collapse site:
Today, the United States has the biggest government in the history of the world, and it gets even bigger with each passing year… The federal government spent $6.13 trillion in 2023. That figure is larger than the GDP of every nation on the entire planet except for the U.S. and China.
The United States government devours some 36% of the gross domestic product.
The communist government of China — meantime — devours 33% of the gross domestic product.
What about Mr. Putin’s totalitarian hell?
Russia’s governmental proportion is precisely the United States’ governmental proportion — 36% of the gross domestic product.
The nightmare theocracy of Iran devours a mere 12% of the gross domestic product.
Again, the United States government devours some 36% of the gross domestic product.
Only an inflationary system can sustain it and the debt beneath it.
We therefore implore you to disregard the administration’s sobs about inflation.
The tears are false…