Inflation Revisited

As if the economy didn't have enough problems, we now have to worry about massive inflation or even hyperinflation. Not that this is a new problem--it has been a problem for years. Peter Schiff talks about it all the time. But the question in my mind is: why? Why does the government support an inflationary policy?

I know that Schiff has a chapter in Crash Proof that discusses the government's rationale for supporting an inflationary policy. But for the average American trying to understand this and to put it into context, it doesn't make any sense. Why would our own government try to hurt its people? Why risk destroying the confidence of the entire American population, leading to outrage and possible uprisings if hyperinflation becomes a reality? I'm not an eternal optimist, but I'm not a conspiracy theorist either. So, in my mind, there must be some rationality behind the insanity.

The government's fiscal and monetary policies are outright reckless. I don't think anyone can justify them, other than the PhD economists who have no practical experience but sit around coming up with "brilliant" economic theories all day. Having a PhD economist in charge of government economic policy is equivalent to having a PhD military historian replace General Petreus to run the war in Iraq. Lots of academic experience; zero practical experience. How about putting someone in charge who built a business; deals with employees, stockholders, and customers? How does a PhD give you the experience and expertise to run anything? But I'm getting off track.

The problem is arrogance. These "brilliant" minds all think they've solved the problem of economic recessions/depressions forever. It's actually a simple fix: just print more money! That was the problem during the Great Depression right? If the U.S. had just printed more money in the 1930s (or "created liquidity" as the great minds would prefer to phrase it), then the Great Depression would not have been nearly as bad as it was. Or am I oversimplifying it? I tend to have that problem.

What about the 1970s? How come nobody refers to that decade when talking about the possible dangers that exist and potential consequences of our actions? So the 1930s can be used as an example, but what about all the other examples throughout history? 1920s Germany? Present day Zimbabwe? Do these examples just not apply because we're the big bad United States?

I'm not an economist, but I have a pretty good understanding of history. I also believe that it doesn't take a PhD in economics to see the dangers that loom. Like Ron Paul said, it doesn't take a genius to figure out that if you print more money it loses its value. The "brilliant" minds in Washington will have you believe that this is much too complicated a situation for the average American to comprehend. Let the PhDs, the politicians, and the talking heads handle it while drowning the taxpayer in debt and devaluing the currency we have to use to feed our families. Having a PhD means you spent a lot of time in school. It doesn't make you automatically right.