When Boom Turns Into Crack-Up Boom

Protecting citizens’ freedom and their private property sounds good when taking an oath.  It’s the duty of the President to solemnly swear. Adventures in social reconstruction, however, are much more appealing to the archetypical insider President like Biden – one beholden to special interests. What’s more, the people demand it.

They want free paychecks, free drugs, free food, free rent, free school, free energy, debt-free loans… You name it. They want it all. And they want much, Much, MORE. Thus, Biden intends to give it to them.

Champions of free money theories, including big stimulus, have been elevated to deliver these dizzying demands. On Tuesday, incoming Secretary of Treasury, Janet Yellen, provided a statement to the Senate Finance Committee during her confirmation hearing. Her solicitation for more stimulus included this choice rationale:

“But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”  

How creating money from thin air and distributing it to a growing class of dependents is supposed to help people is unclear. But what is clear is that free money debases the rewards of hard work, saving money, and paying one’s way in life. It also propels the economy and financial system to an ever more precarious place…a place where only total catastrophe is possible.

Here’s what we mean…

When Boom Turns Into Crack-Up Boom

U.S. dollar printing in its current form is a crude procedure. The Treasury issues debt. The Federal Reserve then expands its balance sheet, creating credit from nothing, and loans it to the Treasury. The U.S. government then spends the debt-based money into the economy via federal contracts, programs, and, now, stimmy checks.

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