Tuesday, February 10, 2009

Headline of the Day

From CNBC:
"US stocks fell sharply Tuesday in a broad-based decline as the government announced details of its latest bailout plan."

Well, if the government were offering to help me, I would probably get pretty droopy myself. These "stimulus plans" are going to cost us at least 2 trillion bucks. There's no way the government can fund that without resorting to printing money. A massive increase in the money supply that doesn't correspond with a massive increase in the supply of (and demand for) goods just leads to increasing prices. Inflation leads to increases in interest rates. Increased interest rates inhibit people from borrowing money to buy houses and grow businesses. Does anybody remember Jimmy Carter and "stagflation?" He achieved what was supposed to be economically impossible - a deep recession with massive inflation and near-unthinkable interest rates. I remember looking at a used car and being offered a "preferred" interest rate of 18.5%.

Everybody seems to be thinking in terms of the New Deal. Nobody seems to recall from history that the New Deal didn't work! (The unemployment rate in 1939, the year WWII broke out in Europe, was 17.5%.) I think we are pretty well screwed.

On a side note, I heard today that the "stimulus" bill contains funds for a panel to weigh cost-benefit analyses for health care procedures. This is the same sort of board that the Canadians use to deny care to the elderly - usually by moving them to the end of a waiting list. That way, you aren't "denied" care by a loving government - you just have to wait 17 months for throat cancer surgery. Of course, by then you're dead. But that's just an incidental statistic, not the fault of National Health Care.

If you don't think it's coming here, you're crazy. Your kids will off you in the name of Federal compassion, and think they're doing something good.