"Ed Huntress" wrote:

So are you predicting the out of control spending going on isn't going to
wipe out my
savings by inflating our currency?

It may, it may not. So far, not. The key will be judging the rates of growth
and the velocity of money as we come out of the slump, and cutting back on
the money supply expansion at a rate that allows GDP to grow without causing
high inflation.

Right now inflation is running at 1.6%, despite all of the money in
circulation. The thing is, it isn't circulating. So cutting back now *would*
wipe out your savings, by leading to a serious decline in demand and a
soon-to-follow devaluation of the dollar. You'd still have the dollars, but
they wouldn't be worth jack ****. And their low value would lead to a big
increase in the debt-service cost of the national debt, as well as all other
interest rates.

Inflation at my level sure isn't at 1.6% though. I suspect you are citing the core
inflation rate that excludes a number of things. I think we need a Joe Six Pack inflation
rate statistic.


This is an economic highwire act of the highest order. One misstep, and
we're in trouble. Anything else -- too much tax cutting, too much
money-printing, too little deficit spending or too many banks allowed to
fail -- and we're screwed for a long time. Of all the risks, the lowest one
is printing too much money. We know how to recover from that. It's painful,
but it's fairly reliable, as Paul Volcker demonstrated 1979 - 1983.

I'm simplistic on this sort of thing. To me, printing money is inflating our currency.
Tax cutting, well this might sound strange coming from me but we got bills we can't pay
now. I'd like to see more Americans paying taxes.


There is no other plan than the one we're following that any competent and
honest economics expert would propose. Even John McCain's chief economic
advisor said so, after Obama was in office and the $700 billion stimulus was
proposed.

Ed, I hope you are right.

Wes