Quantcast

Comments about ‘Why you should stop worrying and learn to love inflation’

Return to article »

Published: Wednesday, Sept. 18 2013 9:35 a.m. MDT

Comments
  • Oldest first
  • Newest first
  • Most recommended
JimE
Kaysville, UT

Uh, inflation exists because the government is diluting the money supply each year by printing more money.
Then they take the excess money and spend it on more government projects.
It's called Keynesian Economics.
Problem is, they are overspending and sending our country into financial ruin.
Something we will never get out of now. Bankruptcy, or collapse, is the only option.
And we all know what that will do to the worlds economy.

In my opinion, those responsible for this are literal traitors to the country and should be punished as a traitor should be punished. They are no different than an outside enemy trying to bring us down.

m.g. scott
clearfield, UT

The thing that worries me about our economy is what happens if there comes a need to really fund the 17 trillion debt with printed money. That would be a lot of paper money floating around and a huge inflation could set in really fast. Controlling that is of course the job of the government, or the Federal Reserve. However, if pushed by outside lenders who own hundreds of billions in bonds, it could happen. And a time may come when the amount of our debt scares even them into creating a run on the bank. With enough debt, even the U.S. economy can crash. How could it not?

The Solution
Las Cruces, NM

JimE,

You are correct, and I totally agree with you about the traitors. The one thing that Keynesian economics fails to account for is to pay back debt and build reserves during times when the economy is not in recession. Our government has done nothing but accumulated debt since the great depression and has only barrowed more, never less.

We are in ruin and can't even pay the interest on our debt any more.

Rothbard
Herriman, Utah

The author of this article needs to read Economics in One Lesson by Henry Hazlitt. Chapter 23 smashes all of the myths perpetuated by the author and the Professor from Massachusetts.

JimInSLC
Salt Lake City, UT

This article talks of "supply-side" and "demand-side" inflation, neither of which applies to our current economic situation. Prices are not going up, the value of the dollar is going down. Printing lots of money is the path to hyper-inflation, in which we all become multimillionaires just like the good people in Zimbabwe. Some factors that are helping prop up the US economy is that the US dollar is still stronger than most other countries currencies. Also, the petro-dollar connection forces everyone to purchase oil using US dollars. If the petro-dollar link is severed we might see a sudden collapse. This may be one reason the US is interfering in Syria now. Syria is too stable economy wise, they do not have central bank influence, no debt to the IMF. Look what happened to Gaddafi when he planned to stop selling Libya's oil for dollars.

David G Woolley
Bountiful, UT

Jim E, MG Scott, The solution, Rothbard, and Jim in SLC:

So very, very happy to see all of you respond, and tell the D-News that they are misleading A LOT OF UTAHNS on this subject. The headline is joke. And the facts in the article are ridiculous. The inflation that is about to be unleashed in our economy, though it may not reach hyperinflationary levels, may still go to 10 or 20% per year. And it has NOTHING to do with supply and demand. The inflation will be related to the inflation of the money supply---dollar printing. Someone should protect readers from crazies like the author of this article. The common man reads the headline, and a few of the facts and figures they don't need to dig any deeper. Where did this author get their economics degree from. Oh, I forgot. Nearly every business school in America teaches Keynsianism. What a farce.

Church member
North Salt Lake, UT

This author is exactly right. Most of our biggest purchases are locked in. Like our house and car payments for example. When inflation hits those payments (house, car, student loans) stay fixed, but our income will go up. So in fact a smaller percentage of our income will go to paying those big purchases off. So we will have a bigger percentage of our money to spend on what we want. It is common sense.

killpack
Sandy, UT

Don't worry about inflation. We're only $17 trillion in debt. No big deal. Right. Inflation is a good thing say some economists who benefit from that outcome, namely speculators and gamblers. For people trying to be responsible and save their money for a rainy day, inflation is NEVER a good thing. I wish so-called experts would quit telling me what I should want in life. I don't want the money I work very hard for to be worth less and less after every day that passes. So quit trying to convince me that that is what I want!

panamadesnews
Lindon, UT

@Church member:

But what about those of us who are retired and on a fixed income? Our retirement and SS dollars do not go up (maybe SS a little, unless SS decides no increase for that year). Our homes are paid off and we have very little debt, which is a good thing, but our income decreases as products increase. As the years roll along, there will be an ever increasing number of retirees, therefore, more and more people will be affected by inflation.

Roland Kayser
Cottonwood Heights, UT

Keynes always taught that budgets should be in balance over the course of an economic cycle. Deficits in bad times, surpluses in good times. Politicians and everyday citizens, however, think that the economy is never "good enough", so they rarely support the policies that will bring about a surplus, namely higher taxes and less spending.

milhouse
Atlanta, GA

To those worried about the government printing money, and citing it as proof that inflation is a big worry: How many of you conduct all of your business in cash?

If you are like most people, almost all of your money is in a bank. Who loans it out to someone. Who buys something from someone. Who also spends it. Every dollar of "yours" can also be claimed by eight or ten other people. The fact is, we don't know how many "dollars" even exist.

And you really think the government printing marginally more quasi-imaginary dollars will actually hurt something in a 15 trillion dollar economy? You're having a laugh.

- An economist.

KJR
Alpine, UT

Those who pointed out that the article fails to take into account cost of debt service and deficit spending are right. The author calls it a closed system. In a way, it is a closed system - like a spacecraft -- with a BIG LEAK. All personal income taxes collected are now insufficient to service the national debt. In addition to the 17 trillion dollar documented debt there are even more trillions of unfunded obligations, mostly pensions that have no actuarial basis for ever being paid in the absence of a rapidly expanding population base. Soe why are things going along so well if we face this dire situation. Well, we've eaten our children's "seed corn" and we're now working on our grandchildren's. Advice to retirees: get a place where you can grow zucchini and raise rabbits. And be prepared to tear up your hardwood floors for heat. Just sayin' . . .

Doogie
South Jordan, Utah

You are being lied to by the government. They keep changing the numbers to make it appear like inflation is only 2%. If the inflation numbers were calculated like they were in the 70s it would be around 10-12% (see John Williams at shadowstats for verification). This is all just propaganda to make people feel good and make the current administration look good. Guess what? It isn't working, the cost of living is rising, have you been to the grocery store lately? What is being sold are smaller portions at the same prices to make it look like prices are not going up. As mentioned earlier, once the US loses its status as the global reserve currency for the dollar and that could happen on any day based on the events that are transpiring we are in for hyperinflation. That's ok, the government will just change again how they calculate inflation until they have no more changes they can make!

David G Woolley
Bountiful, UT

Dear Milhouse Economist:

The inflationary pressures we're talking about (we meaning Jim E, MG Scott, The solution, Rothbard, and Jim in SLC) are long term monetary pressures cooked into a debt-based monetary system. You can hypothesize all the day long about the inflationary forces on a month over month or year over year basis, but the long term forces, the ones that percolate beneath the economic surface are based in sound money or the lack of it. Currency is the ocean all of us swim in, "economically speaking", and unsound money has terrible inflationary consequences. Since 1971 we've been swimming in a fiat currency ocean, the dollar tied to nothing but our faith that it has any value at all. History tells us that the life of a fiat currency is about forty years. The final phase of any fiat currency usually ends in a violent currency war. And, if you've been paying any attention to the money printing in Japan, China, and even in the EU despite it being against the Mastricht treaty, you would understand that we're doing business on borrowed time (and borrowed money).

--a PhD :)

JimInSLC
Salt Lake City, UT

@milhouse

How much is marginally more dollars?

QE3 started in September of last year and they have been printing $85 billion each and every month since, just over $1 trillion dollars now and growing. The QE3 money is what is now propping up the stock market. When the money printing stops, there will be a drop in stocks as speculators cash out. The stock market rose another 150 points today when it was reported that the money printing would continue.

It's not so much the printing of the money but nothing is being done to pay down the debt, only more and more government spending on wars, spying, and who knows what else.

I do not conduct business in cash, but I do pay off my credit card balance every month. Something that the government does not seem to care to do.

Lastly, the bulk of the money of that $15 trillion dollar economy is in the hands of people and corporations that can take advantage of loop-holes to avoid paying taxes on it.

Doogie
South Jordan, Utah

The fed is in a pickle. They want to stop printing money but they can't because if they do the economy will tank. The IMF head warned the US that they can't stop printing money. Why? Because their economies will tank as well. So everyone in the world is printing money and it will end badly as David Woolley points out. Why do you think China has purchased over a 1,000 tons of gold year to date? I think someone is smarter out there than the Bozos at the fed. We will have a reset given the current state of affairs, it is just a matter of time.

Max
Charlotte, NC

A lot of conspiracy theories and economic illiteracy going on here. Did anybody here study economics? The economists interviewed is correct, there is an OPTIMAL level of inflation that helps labor markets clear. He didn't say the higher inflation is the better it is. And, yes there are two types of inflation: Demand Pull (when aggregate demand shifts right and pulls prices up. This is the kind of inflation we get if the Fed buys too many bonds which injects too much money into the economy, and there are Supply Shocks that drive up prices when a good disappears through drought, disaster, or embargo.

As for Keynesian economics, I have to respond to this comment:

The one thing that Keynesian economics fails to account for is to pay back debt and build reserves during times when the economy is not in recession.

This is precisely what John Maynard Keynes had in mind so don't blame him. It is the politicians who have taken his ideas and distorted them almost beyond recognition who are to blame. In fact, before he died, Keynes said he was worried that his disciples where taking his ideas too far.

OlderGreg
USA, CA

Kidding, right? Especially when "inflation" does not include transportation costs, medical costs, taxes, and food costs.

Wayne Rout
El Paso, TX

The Obama's have changed the way inflation is computed so the low numbers published by the government no longer indicate real inflation. Because the numbers are rigged, the logic in the above article is not totally valid. Inflation only helps those, like the government, who are in debt.

to comment

DeseretNews.com encourages a civil dialogue among its readers. We welcome your thoughtful comments.
About comments