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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (26187)	7/28/2000 9:32:00 AM
From: Neocon	Respond to of 769670

Thanks for jumping on that comment. A balanced increase in the money supply, pegged to GDP growth, is necessary and non- inflationary. A slight bit of inflation does not hurt things much, and can be factored into everyone's calculations. But inflation is generally destructive of the economy, eroding savings, making long term planning difficult, and mostly benefiting heavy debtors, including governments.......

To: DMaA who wrote (26187)	7/29/2000 3:39:24 AM
From: nihil	Respond to of 769670

Inflation is hardly a tax. It is a healthy way to induce economic growth, if people hold on to their money too tightly or are afraid to invest. Generalized steady inflation has characterized world economic history. With metal money inflation was caused by coin clipping (rendering the bullion value less than the face value) or money discoveries. It worked pretty well for many years. Of course, the American metals in the 16th century threw Europe into turmoil, especially Spain which catapulted into a world empire but suffered internal economic collapse because all vigorous and warlike youth went off to rob Indians. Much too much of a good thing. Its for the best to have a mild steady predictable inflation. It encourages rogues to borrow and establish new businesses, and euthanases the rentiers -- a class of widows and lazy old men who need to be stirring to keep their heart rates up. The ups are wonderful. You cannot have an economic expansion without upward pressure on prices. Never has been and never will be. But there is no need to let things get out of hand either up or down. Runaway inflation is a wonderful opportunity for investment. You actually ought to read about Germany and its hyperinflation. Everyone knew what caused it, but few know why the German government encouraged it. It had little or nothing to do with the rise Hitler six years later. That economic collapse was a result of Hoover (Dawes plan) and Allied Reparations and Smoot-Hawley. Keynes explained all of this in advance in his Economic Consequences of the Peace years before. Our government learned from this and soon restored Germany and Japan to prosperity after WWII. But there were some marvelous inflationary years in western Germany after WWI. For a carton of American GI cigarettes, you could get a night (or week if you brought the food) with a lovely fraulein. Gave up smoking.