Value / Worth
I liked reading the proposal, and didn't even quibble about the math as I figured it's just a little chuckling pipe dream anyway.I just thought I would throw this thought in: Assume that tomorrow, every man, woman, and child in America were given one million dollars. A family of six would have six million in sudden cash; a single retiree would have one million, etc.Most of us would probably assume that, given that kind of cash, we could do all kinds of neat things like pay off mortgages and erase old debts.However,What happens the day after tomorrow, when so much cash has flooded the market? Imagine a can of green beans suddenly costing $200 or more. Imagine a loaf of bread costing $500. Etc.Economics is a language that communicates value, and value has to do with relative scarcity. If you print up a ton of money and distribute it freely, you have just devalued the currency by the amount printed.This is what bothers me the most about this so-called bailout deal being trotted out in Washington. No matter what else happens, in the end, we'll be dealing with an economy that is awash in sudden "fiat money" (money that holds value solely because the goverment claims that it does, as opposed to money that is backed by some finite resource such as gold).What good is it to hold a billion dollars in your hands, if that money isn't worth the paper it is printed on? Why not just add a few zeroes and make it a trillion? A quadrillion? What is the difference?A quick look at the problems caused by hyperinflation in other countries, other times, should suffice to put all talk of this ridiculous "bailout" to rest. But it seems no one is looking. Our country's economics are run by followers of John Maynard Keynes, whose economic message was "keep interest rates low to stimulate spending; print up as much money as needed when the bubbles caused by those low interest rates burst (which they inevitably do). Don't worry about the inflation, since inflation is the government's friend. (It tends to shrink the foreign debt.)"Herring405
H
Herring405
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I liked reading the proposal, and didn't even quibble about the math as I figured it's just a little chuckling pipe dream anyway.I just thought I would throw this thought in: Assume that tomorrow, every man, woman, and child in America were given one million dollars. A family of six would have six million in sudden cash; a single retiree would have one million, etc.Most of us would probably assume that, given that kind of cash, we could do all kinds of neat things like pay off mortgages and erase old debts.However,What happens the day after tomorrow, when so much cash has flooded the market? Imagine a can of green beans suddenly costing $200 or more. Imagine a loaf of bread costing $500. Etc.Economics is a language that communicates value, and value has to do with relative scarcity. If you print up a ton of money and distribute it freely, you have just devalued the currency by the amount printed.This is what bothers me the most about this so-called bailout deal being trotted out in Washington. No matter what else happens, in the end, we'll be dealing with an economy that is awash in sudden "fiat money" (money that holds value solely because the goverment claims that it does, as opposed to money that is backed by some finite resource such as gold).What good is it to hold a billion dollars in your hands, if that money isn't worth the paper it is printed on? Why not just add a few zeroes and make it a trillion? A quadrillion? What is the difference?A quick look at the problems caused by hyperinflation in other countries, other times, should suffice to put all talk of this ridiculous "bailout" to rest. But it seems no one is looking. Our country's economics are run by followers of John Maynard Keynes, whose economic message was "keep interest rates low to stimulate spending; print up as much money as needed when the bubbles caused by those low interest rates burst (which they inevitably do). Don't worry about the inflation, since inflation is the government's friend. (It tends to shrink the foreign debt.)"Herring405
