One doesn’t need to read beyond the first sentence of a front-page article from the November 26th edition of the New York Times to see more absurdist logic rearing its ugly head.
What pray tell could be the next act in the weekly soap titled The State’s Biggest Boners? Once again, they have a grand scheme to help us. Here it is straight from the horse head’s mouth, the New York Times: "The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system."
Yee ha! Hyperinflation here we come! Little short on spending cash? Print some more! Why didn’t I think of that? Maybe I should have taken out a loan and sprung for the Uber Gut Reich Mark color printer capable of running off thousands of undetectable funny money bills in an afternoon. But then I don’t need to bother. The Federal Reserve and Treasury are going to do that for me. How kind and thoughtful.
Are these people, for lack of a better term… stupid? Never mind. The question is rhetorical.
I’m ready and willing to admit I am no economist. On the other hand, I actually paid attention in history class. I did not buy the answers to the test questions either. Let’s look back to the days of the Weimar Republic in Germany after WW I. It seems times were tough, jobs hard to find and the economy a mess. Sound familiar? So, how did they "fix" it? They printed money until they couldn’t afford more paper. And surprise, surprise… it didn’t work! Inflation ran amuck and the prices of basic necessities skyrocketed. Hence, the need for wheelbarrows to lug all their funny money to the market so they could buy a loaf of bread… if they could find one that cheap.
Friends, Americans, countrymen, here’s a real simple common sense unalterable rule of money. The more money the State prints, the less it is worth.
The actual value of your socks, cheeseburgers, ramshackle hovels and gas-guzzling Hummer H3s will remain exactly the same. However, the price tag will go shooting way up. It’s just like the dump we bought in Los Angeles for $130K and sold a few years later for $450K. It was still a dump worth $130K… if that! And soon our profits will be worth about $10K
The net result after the Feds "help you out" by printing more money is simple. You still will not be able to afford anything! In fact, since you will soon have to buy a wheelbarrow you will be worse off than if they did nothing. And that is exactly what they should do. Nothing.
How about that $800 billion? Well… if it’s printed money is it really worth $800 billion? No of course not. It’s worth no more than the paper it’s printed on, to use an ancient phrase. There’s nothing to back it up, no gold reserves, no booming industries, no nothin’. Were the plan to borrow $800 billion that would be bad enough, since borrowing more money means selling off more of America’s future to China and shackling future generations with heavy tax plans which only pay off the interest. That would be a bit like cousin Doofus and his charming wife Dodie, their maxed out credit card collection and McMansion with it’s too good to be true ARM. Oh wait… I forgot. The bank foreclosed on the McMansion.
Doofus and Dodie now live in Orange County’s Tent City in Southern California. Wait a minute… I’m wrong. One must be a resident of the city of Ontario to be homeless in Tent City. Talk about absurdist logic! I haven’t a clue where Doofus and Dodie are now.
Or maybe the plan has some sort of twisted logic behind it. Let’s see, how about we totally destroy the value of the US dollar by printing money up the wazoo. Then, we won’t have to pay off those Chinese loans! Or at least what we do pay back is a drop in the bucket. Hey that’s pure genius! What’s that? China is calling in its monstrous loans? Sure fine. A trillion US dollars can’t buy a two-door Daihatsu sedan!
So why stop at a measly $800 billion? How about $3 trillion? Isn’t that what Joseph E. Stiglitz and Linda J. Bilmes predict the war in Iraq will cost in the long run? Why stop there? Let’s run off $100 trillion, $200 trillion or $500 trillion. Since none of it’s real the sky’s the limit!
But I seriously doubt this is a wise move.
So then, how do we get out of the real crisis after the country is flooded with worthless Republic Credits? Hey I got an idea! Start a war! Kick ass! It worked for Nazi Germany… Uh well… maybe that’s a bad example. Hm… let me see if I can concoct a better one.
Hang on! We did start a war! Two of them in fact. How could I forget? I guess Iraq and Afghanistan aren’t the crowd pleasers they once were. But there’s a problem. These fun-filled military adventures have not resulted in a "booming" economy back on the ranch. Aye Carumba! Something must be awry. Where did all that money go? It certainly did not find its way back into the pockets of the people. Oh well. Easy come easy go. I guess it’s all lost in the desert, vanishing with the sands of time and disappearing into the mattresses of Halliburton, KBR, Blackwater and a collection of shyster war profiteers.
Maybe it would be better to leave well enough alone. The times will be tough for a lot of people. But the economy will iron itself out naturally someday. With the State doing something stupid to fix it, the problem will only get worse. And printing $800 billion is about as stupid as stupid can be.
Well Uncle Scam, I have a favor to ask. Please don’t try to help. Your track record has not been good.
November 28, 2008
Tom Chartier [send him mail] played lead guitar in legendary Los Angeles punk band The Rotters for 26 years until their final appearance in January of 2004. He has lived in Tokyo and Los Angeles. Currently he resides somewhere in the Caribbean.