Lukey
Senator
They hang their hat on the fact that we can spend whatever we want because we are a currency issuer (and also that current inflation rates are low). They are correct in both of their observations, but there is a long term price to be paid, and that will eventually show up in our standard of living. It is not a coincidence that over the past thirty years, as we have driven the size of government to unprecedented (peacetime) heights, and passed myriad laws and regulations that have driven our productive capacities overseas, that we have also (finally) begun to witness a decrease in our standard of living:
What we leave to our grandchildren is a certain standard of living. Whether that standard of living is better or worse than ours is up to us. Remember, the burden on a sovereign currency issuer is always inflation and not solvency. It’s quite possible that the US government could print so much money in excess of our productive capacity that it causes ravaging hyperinflation that ruins an entire generation of living standards. We could make huge policy mistakes. We could become far less productive. We could incur foreign debts. We could do any multitude of things that ruins our grandchildren’s living standards. But what we won’t do is leave them with a bill that needs to be paid back. Instead, we will leave them with a certain living standard that is based on a multitude of factors based on the way our government spends and the way the private sector produces goods and services in the future.
The inflation is coming (as soon as the [world] economy starts to pick up), unless we walk the Keynesian economics back. And the lowering of our grandchildrens' standard of living will be violent, unless we walk the progressive regulatory apparatus back. Do NOT be fooled by the Keynesian siren song that says "there's no inflation, full spending ahead."
What we leave to our grandchildren is a certain standard of living. Whether that standard of living is better or worse than ours is up to us. Remember, the burden on a sovereign currency issuer is always inflation and not solvency. It’s quite possible that the US government could print so much money in excess of our productive capacity that it causes ravaging hyperinflation that ruins an entire generation of living standards. We could make huge policy mistakes. We could become far less productive. We could incur foreign debts. We could do any multitude of things that ruins our grandchildren’s living standards. But what we won’t do is leave them with a bill that needs to be paid back. Instead, we will leave them with a certain living standard that is based on a multitude of factors based on the way our government spends and the way the private sector produces goods and services in the future.
The inflation is coming (as soon as the [world] economy starts to pick up), unless we walk the Keynesian economics back. And the lowering of our grandchildrens' standard of living will be violent, unless we walk the progressive regulatory apparatus back. Do NOT be fooled by the Keynesian siren song that says "there's no inflation, full spending ahead."