Stagflation, Here We Come

He was describing the real world… the win-win world. If you want something, you’ve got to give something in return. Which means you have to produce something to give – and not just a piece of paper with green ink on it.

This basic insight is at the heart of civilization (trading, sharing, cooperating… rather than stealing). And it is at the heart of progress and prosperity, too (the more you want, the more new and better products you have to come up with).

But the real métier of most modern economists is not merely telling soothing and incoherent lies; it’s preventing people from seeing the truth.

Rose-colored glasses are not enough. They go for the eyes… with sharp objects, absurd theories, and outrageous lies.

They tell people they can get richer by hocus pocus – increasing the money supply, lowering the interest rate, manipulating statistics, or stealing from future generations by racking up obscene levels of debt.

Fin de Bubble Age

Asked whether the tax cut might ignite enough extra growth to raise federal revenues and reduce deficits, Mr. Greenspan was uncharacteristically direct:

“No… there is no chance,” we heard him say. “You get a little ‘bounce’ at the beginning, but that is just about over. After that, a tax cut makes no sense unless you are willing to ‘fund’ it… that is, to cut spending.”

“You can’t get something for nothing,” he might have said, providing a handy epithet for the whole Fin de Bubble Age.

An unfunded tax cut is just a hustle, shifting the burden of government boondoggles from the current taxpayers to the taxpayers of tomorrow. The money (the product!) has to come from somewhere.

Since our own outlook aligns nicely with that of the former Fed chief, aka Alan “Bubbles” Greenspan, we presume we are both wrong. But you never know.

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