To the editor,
Never thought much about whether I look at things from the left or right, except for not wanting to approach anything so far either way that I end up sitting next to Marx or Hitler.
That said, I stumbled upon this statement by an elected official who is apparently of the liberal bent. And knowing that someone can say this with a straight face does truly amaze me.
Chairman of the House Budget Committee Rep. John Yarmuth (D-KY) – “We are not broke as a nation. We are not bankrupt. We can’t go bankrupt. We absolutely cannot go bankrupt because we have the power to create as much money as we need to spend to serve the American people.”
Milton Friedman, a Nobel Prize-winning economist, espoused something known as monetarism, which postulates that as the money supply grows, so too will inflation. If the Federal Reserve increases the money supply too rapidly (printing more money), inflation increases. Of course, inflation increases the cost of goods and puts downward pressure on the economy. Too much “new money” puts us into a recession or depression.
The task, then, is a balancing act that will keep sufficient money in the economy to allow it to function smoothly, but not so much that it will cause too high an inflation rate.
One example of printing too much money is that of the Confederacy during our Civil War.
So much money was printed that inflation reached 700% by 1864, then soared to over 5,000% by the end of the war.
Another well-known example is from Germany in 1922-1923; inflation reached an almost impossible to believe 200 billion per cent; here it is with all the zeroes attached – 200,000,000,000%.
Today, we have the example of Venezuela, where inflation is around 2500 – 2900%. Crazy times!
So, when I read that the leader of the House Budget Committee believes there is no limit to the amount of money we can print, color me just a wee bit incredulous.
Seems that in his mind the only monetary limitation is, “How much paper can we feed into those presses?” (What was in those Yale economics classes? Or maybe he didn’t take any economics…)
Strike me strange, but when you’re so far in debt that you’ve ensured your great-grandchildren will still be paying off your debt, it might be time to come up with a better fiscal policy.
Nah, let’s go grab some more paper and ink for the presses!
Clinton (Skip) Barnes
Jefferson, Texas