The Dangerous Printing Press

The run-away government keeps pontificating, posturing and pandering with each day bringing a new massive give-away program of tax dollars accompanied by a sequence of disclosures of legislative incompetence followed by a televised exercise in blame shifting. It's great theater but only tragedy. There's not a lick of comedy except for the darkest kind.

Yesterday brought the news of the Federal Reserve leaping further into the fray. They've run out of gas for their usual monetarist policy tools, the manipulation of interest rates. Unlike our "progressive" federal tax structure in which you can give someone who pays zero tax a tax rebate, when it comes to interest rates it isn't reasonable to lower them below zero. Paying people to take money is still not within the acceptable range of policy. Maybe next year.

Here's a piece at the Atlantic:

Channeling Everett Dirksen

It was the mid-Sixties when Sen. Dirksen, that velvet-voiced senior statesman from Illinois, intoned, "a billion here, a billion there, and pretty soon you're talking about real money."

The line drew attention because in those days a billion was a meaningful number. Now, we don't even take notice until we are discussing hundreds of billions and the previously rare word, trillion, has become part of the daily lexicon.

The Fed's action yesterday is the firing up of the virtual money presses. As noted in the Atlantic, today "money" isn't always greenbacks. More often it is ledger book entries of fund transfers and debt movements. Think about your personal life. Do you carry cash or credit cards more often? Is remembering your debit PIN more common than counting your change?

If we start printing money, which isn't really anything but a promise, don't we quickly leap to the top of that slippery ski-jump of inflation? Aren't we standing in the gate of a wild excursion in which we see a leap-frogging of costs rising, wages countering, savings deteriorating and debts becoming meaningless because they will be paid in tomorrow's money which is worth much less than today's

If you went to school in the '50s, '60s or '70s you may still have a world history textbook in your basement that tells the story of the Weimar Republic in Germany. It was the period between WW I and WW II, leading to the rise of Hitler. The section in my book was illustrated by a photo of an old German woman pushing a wheelbarrow down the street filled with currency. She was taking bushels of Reichmarks to the bakerei to buy the loaf of daily bread. Tomorrow's loaf would cost appreciably more.

Failure to learn the lessons of history dooms us to repeat them. Then came Hitler, Mussolini, Franco and Stalin. Could that sort of life be in our future under current trends? Demagogues leading governments?

What do you think?