Inflation: Crowding Out The Real Economy

“You don’t? Well, you don’t have to understand what it eh, it eh . . . It was printed in eh . . . Washington. Well, and when they print something in Washington, they know what it means.” – Green Acres

“Never trust an actor with a gun.” – Abraham Lincoln

Like the beginning of a movie starring Will Smith as Winnie the Pooh, Amy Schumer as Piglet, and Mitt “Mittens” Romney as Christopher Robin, you know one thing: the pain is only starting.

The pain I’m speaking of is inflation, though. I’d love to be the bearer of happy news. I’d love to say, “Nah, as soon as things straighten out in (spins wheel) China West Taiwan, things will be better. Nope.

Let me explain.

The Federal Government is really good at exactly two things, and one of them is spending money. Since they already donated a few billion bucks worth of stuff to the Taliban, they decided to go for a few trillion to everyone who was breathing.

What’s the difference between a rake and an AK-47? Don’t ask me, I just fly the drone.

The spending has been amazing, and it has created the expected result: inflation. It’s not done, though.

As I said, the Federal Government is good at spending money, but it’s slow at spending money. Although it looks like the Federal Government is just willy-nilly stuffing the money it just printed into the mouths of anyone nearby, it’s much more complicated than that.

First, a bureaucrat has to invent the program. And that means?

Paperwork. That has to be reviewed and approved. And every buzzword of sustainable and underserved and economic equity has to be mashed into the program and form. Once complete?

The program has to be announced, and various states, counties, alternative bands, and alternative energy providers then pounce on the paperwork to ask for buckets of cash. Biden’s grants for free crack pipes won’t figure out what communities they need to go to by themselves!

This process takes months. Then, once awarded, people need to order the crack pipes from China Terre Haute. Why not China? This is the Federal Government, and we know it is charged with protecting the American Crackpipe Maker Equalitarian Sisterhood (ACMES). So, all the crack pipe materials will be locally sourced from approved Wiccans.

How to cook crack and clean crabs: step one – use commas.

If it stopped at crack pipes, it would be fine, probably. But it’s not just that. It’s concrete for a burst of road construction. It’s rebar for the concrete. It’s plywood for the forms.

There was already price pressure on almost everything. Now that some of the largest steel (around 100 million tons of production) works in the world are shut down or sanctioned due to Vlad’s Spring Vacation, (not to mention fuel costs shooting up higher than a T-72 turret) that rebar is now much more expensive.

If that were the only problem, these sort of crushing cost increases would probably be something that we could live with. But whenever the government wants to buy a cubic yard of concrete to make a new office to process paperwork for Build Back Better Bux applications, well, that increases the cost.

For everyone.

In Denmark, they tried to repave a street with Legos®. They ran into a lot of roadblocks.

It makes the cost of building or expanding a business higher, unpredictable, and perhaps unattainable. Government spending – trillions of dollars of government spending that came from money that was simply wished into existence – crowds out private spending.

That means the new Pizza Hut® can’t be built because concrete is too expensive. That means the new PEZ™ factory can’t be built to keep up with the PEZ© demand because steel for the machinery costs too much. The alternatives that create a productive economy are walled off due to increased costs.

So, it’s happening now.

A little.

I’m telling you now, the big waves of Fed.Gov spending have yet to hit. Hundreds of millions of dollars more than the usual printing are hitting the economy – each month. The pressure from printing has yet to stop. It has yet to slow. It is still increasing.

I don’t think my doctor likes me. I called him and told him that I took a bunch of sleeping pills. He told me have a few drinks to relax.

The economy of every country that hyperinflated did so because of one simple reason: the leadership seemed to not understand that printing didn’t lead to prosperity. They had some sort of belief that money was a magical totem so that they could print more, and people would be happy.

In small quantities, it works. Home prices go up. Prices go up. People who save (as always) are the ones that get burned as their saved cash lowers in value.

Germany hyperinflated in the 1920s because they wanted to print cash. Lots of it. They didn’t have the good fortune to be able to create all they wanted with computers and the press of a button, so they had to hyperinflate the old-fashioned way: printing.

How bad did it get?

That certainly didn’t lead to any sort of social upheaval.

They managed to double the capacity of the printing press by only printing on one side.

I bet we can match that: I bet we can start making electronic money with only four bits per byte. I guess I can be the bearer of glad tidings and report there is good news, though:

We don’t have to watch a movie starring Will Smith as Winnie the Pooh, Amy Schumer as Piglet, and Mitt “Mittens” Romney as Christopher Robin. We’ve got that going for us.