Deficits the causes matter

No need to worry about the deficit, little subjects...I mean, citizens. We'll just create a few trillion more paper dollars out of thin air, not backed by anything tangible. See...no more deficit!

That is what the Chinese are really worried about, with their trillions of dollars invested in our debt-ridden economy. Inflation could whittle that down down considerably, a real loss for them. Unfortunately, "printing press" money always has the same result - hyperinflation. It happened in the Weimar Republic in Germany, just before the rise of Adolf Hitler. A round of "hyperinflation" in this nation would wipe out the liquid assets of the middle class almost overnight. This is how - in essence - the middle class (and our children and grandchildren) will be the ones who ultimately "pay" for all this debt.

It's not the financial speculators who are creating imitation money, charging it to the national debt, them expecting United States citizens to "tighten your belts just a little more". One multi-billion (multi-trillion nowadays) pork barrel program after another, keep promising the little people what they want to hear, while allowing special interest groups to drive the bus. I'll gladly pay you tomorrow for a hamburger today. Our benevolent govt keeps racking up the hamburgers, making wondrous promises about "tomorrow".

Talking about the devaluation of our currency...it's not a good sign when the oil (and other commodity) producing nations choose a currency other than the dollar by which to value their product. Google "oil dollar standard" for plenty of reading.

Ron Paul has some interesting thoughts on this topic. See:

http://www.house.gov/paul/congrec/co...6/cr021506.htm

A hundred years ago it was called “dollar diplomacy.” After World War II, and especially after the fall of the Soviet Union in 1989, that policy evolved into “dollar hegemony.” But after all these many years of great success, our dollar dominance is coming to an end.

It has been said, rightly, that he who holds the gold makes the rules. In earlier times it was readily accepted that fair and honest trade required an exchange for something of real value.

First it was simply barter of goods. Then it was discovered that gold held a universal attraction, and was a convenient substitute for more cumbersome barter transactions. Not only did gold facilitate exchange of goods and services, it served as a store of value for those who wanted to save for a rainy day.

Though money developed naturally in the marketplace, as governments grew in power they assumed monopoly control over money. Sometimes governments succeeded in guaranteeing the quality and purity of gold, but in time governments learned to outspend their revenues. New or higher taxes always incurred the disapproval of the people, so it wasn’t long before Kings and Caesars learned how to inflate their currencies by reducing the amount of gold in each coin-- always hoping their subjects wouldn’t discover the fraud. But the people always did, and they strenuously objected.

-snip-

Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare. The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for one’s actions is rejected.

When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press.


Years ago, our money was gold and silver. It was actually WORTH something. Small denomination coins were copper (or other cheap metal) alloys. We stopped using gold in our regular coinage back in 1933. We stopped using 90% silver in our coinage in 1964, switching to clad (copper) coinage. By 1982, the value of the copper in a penny was worth about twice the face value, so we switched to copper plated zinc for our penny coins. About a year and a half ago, a bill was introduced to make our coins out of even cheaper metal (since we were once again in a situation where the cost of materials/manufacturing/distribution of a penny was ~1.6 times the face value).

Welcome to the new Amerika. Get your wheelbarrows ready, so you'll be able to carry enough paper money to buy a loaf of bread.

They used to be called the "tax and spend" politicians. Now they have a new calling card - the "spend your way until oblivion and then tax" politicians. In the end, somebody's going to have to pay for all this exponential debt that D.C. keeps piling up. And it's going to be the middle class, unfortunately. Obama's going to "spread our wealth around" until it's all gone. Whatever happened to the virtues of fiscal responsibility and thrift?