Nov
19

Steroids lure on Capitol Hill

By Katie Kieffer

Image credit: http://tinyurl.com/ykepaff

Image credit: http://tinyurl.com/ykepaff

Pump. Pump. Pump. Don’t you love that sound? It’s the sound of your heart beating. It’s the sound of your bouncy fitness instructor cheering your class to: “Pump, pump, pump it up!” But, it sounds best if you’re in Washington, D.C. – at the Department of the Treasury – watching freshly baked dollars get pumped into our economy.

Inflation is a term that’s tossed around rather casually lately. My assessment is that many Americans have become resigned to the notion that inflation is the ultimate destiny for our currency. Billboards, T.V. and radio ads for gold abound: Inflation is coming! You better defend yourself!

Yes, inflation is unavoidable to some extent. On the other hand – we could STOP printing money. We could do this if politicians would start listening to how concerned Americans are about inflation – to the point that they are stocking up on gold.

Inflation can – in certain contexts – be useful and positive:

  1. To emphasize a point. For instance, writers will often bold or italicize portions of a sentence that were not initially bolded or italicized in order to hone in on a point. The writer will then add a note to the reader such as, “emphasis added.”
  2. For humor. Comedies like Saturday Night Live, the Late Show with David Letterman and South Park are not news shows, but they frequently comment on the news in an exaggerated way.

The inflation of the dollar is neither emphatic nor humorous. The government should not be creating money and artificially stimulating the dollar in the emphatic sense – unless we want to be a national billboard to other nations that we’re unstable and lack fiscal understanding. Additionally, while a puffed up dollar is fodder for political cartoonists, it’s not very funny in real life when I’m shopping for real goods and services.

Once addicted to a drug, it’s hard to quit, especially cold turkey. Inflation – whether it’s in currency or in story-telling – is really another name for an artificial, short-term enhancement or drug.  Inflation is unnatural puffery. It blows things up to appear bigger, better or more useful than they are in the long-term. In economic terms, inflation is an impatient man’s way to achieve the appearance of a solution when he’s unwilling to trust the markets to rally on their own.

Inflation degrades reality, and as Steve Forbes puts it, creates “junk” money. This video explains Forbes’ take on the dollar.

Image credit: http://tinyurl.com/kkvoac

Steroids and other drugs that inflate performance don’t help sports. Likewise, it seems logical that inflating the value of our dollar is a bad idea, but the rules of politics are always a little looser than those in the real word. Even entertainers, like New York Yankees third baseman, A-rod, are held to a higher standard than the leaders of our government.  Sports players – professional entertainers – are strictly regulated by a government that refuses to regulate itself.

Given the choice, I’d rather have our government focus on strengthening our currency than cracking down on sports players. Take care of your own steroid use before you meddle in entertainment, Washington: Your addiction to spending and inflation impacts Americans on a daily basis.

4 Responses to “Steroids lure on Capitol Hill”

  1. Default avatar aguy says:

    Mitch, I didn’t say people shouldn’t speak their mind; I said poll numbers shouldn’t dictate economic policy. That said, if inflation stops falling, it might be problem like you said and should be addressed. Even if it doesn’t spring from intervention (Carter), it should be addressed … but only if it’s a problem.

    Yeah, that’s a winning strategy, especially since Obama added $1.4 trillion this year and more trillions in the years to come.

    I’ll just keep repeating this: Where were you when Bush was running up the deficit? Running up the deficit now is a necessary evil to bring back the economy and it’s worked. Jobs come back as businesses stabilize and start making money to pay workers.

    I am learning that deficits are not a problem if they are done needlessly in a time of growth. And, health reforms are okay if it costs more than Obama’s, and is 100% added to the deficit. These things are okay because over 40 Republicans Senators vote for them, not because they add to the deficit.

    So, if a strong Republican Congress passes tax cuts in time of growth and passes health reform, but throws both on to the deficit –> that’s a good thing and deserve my full support. But, if a weak Democratic Congress passes a needed stimulus and passes health reform that will reduce the deficit: we got to plan a tea party and take our country back!

  2. Default avatar Ryan says:

    Aguy – I’m going to have to say that more inflation is a bad idea. Here’s what you said: “Truth is, inflation’s been falling. It’s so low that some regional Fed Reserve economists are hoping for more inflation. More! That’s because it helps jobs and helps us pay off debt (of which we got tons).”

    For some reason it just seems like a bad idea to devalue my money. And since I actually have savings and funds saved for retirement, (I’m responsible for my own well-being, unlike all those who voted in Obama for more free handouts) I don’t want those savings to lose all their value. Yes! Let’s have 15% inflation – that way my money isn’t worth as much, I can’t buy as much, I can’t save as much, anything I have saved is worthless, etc., etc. All so it’s “easier” to pay off the national debt. Yeah, that’s a winning strategy, especially since Obama added $1.4 trillion this year and more trillions in the years to come. We haven’t payed down the debt in years, and you’re criticizing Katie for wanting to think about inflation before it happens?….Maybe we should actually start paying off the debt before we start rejoicing about how having high inflation is going to help pay it off….

  3. Default avatar MBerg says:

    AG,

    Problem is, things we do today to “fix” the jobs situation (let’s presume for a moment that Keynesianism creates jobs, which so far in The One’s administration doesn’t seem to be the case), will lead, as “unintended” consequences, to inflation down the road. This is especially bad if the intervention doesn’t solve unemployment, but does trigger inflation. This was what life was like throughout the Carter years. I don’t really wanna go back to that.

    I mean, if I as a “common folk” am allowed to say so.

  4. Default avatar aguy says:

    We could do this if politicians would start listening to how concerned Americans are about inflation – to the point that they are stocking up on gold.

    So we should run our monetary policy based on the common folk’s irrational fears?

    Thing is (although your writing is rocking these days) this inflation stuff is non-sense. Why can’t the Fed worry about inflation when it becomes a problem? Right now, it is most definitely not a problem. There’s a great article about that here. Why place the “possible threat” of inflation over our present needs for jobs and paying down the debt?

    Truth is, inflation’s been falling. It’s so low that some regional Fed Reserve economists are hoping for more inflation. More! That’s because it helps jobs and helps us pay off debt (of which we got tons). Other non-partisan economists are hoping for this too. It’s not so crazy right now. Inflation’s a big deal, but the US has got more-pressing problems at the moment.

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