National Inflation Association Article Comment

US-Inflation-by-year
Inflation chart by user Monkeyman (Creative Commons SA 3.0)

Things got heated in my comments section back in 2010-2011 on

Fact Checking The National Inflation Association And its Hyperinflation Fear-Mongering.

I didn’t have the time to address all the bad information. And honestly I didn’t consider it worth my time even if did have it.

But I have some extra good free time lately, some more health care policy wisdom, and the power of hindsight. Why not?

A user named Flagrantbagel left a supportive comment on my NIA article:

The following is an unedited copy of someone’s reply to Flagrantbagel.

Left January 14, 2011 at 2:45 pm

Deepblue

You won’t support someone because they’re supported by Steve Forbes, but you’ll support someone financed and endorsed by George Soros?

I’d suggest you research the “Quantum fund” and find out how the “Man who broke the bank of England” made his money. Note also that this very same man, George Soros, was branded (and convicted) in Thailand as an “economic war criminal” who “sucks the blood from the people” after causing the Asian Debt Crisis in ’97. Soros, the man also behind the collapse of the Russian currency, the ruble, in ’99 and afterward publically boasted that “the former Soviet Empire is now called the Soros Empire.”(Google “Russiagate”). Just look up Soros’ *** latest conviction *** in June of 2006 in France for his attempt to takeover the Societe Generale bank.

Soros is the most notorious derivatives trader in History.. and who are we told created America’s financial crisis by every pundit? Deriviatives traders and speculators. Odd that such a speculator would be the largest financial contributor to the “just happened to inherit it” administration and all it’s various supporting “progressive” organizations, isn’t it? Yet you seem to support this all unabashedly.

Here’s a suggestion. While you’re busy NOT doing your research, you might want to glimpse at Article I, Section 8, Clause 1 of the United States Constitution, also known as the Taxing and Spending Clause… a.k.a. – “The Power of the Purse.”

It declares that it is *** Congress *** and *** NOT *** The President who is in control of all spending. Even More specifically, that this power rests in the House of Representatives, where *** ALL *** spending (“Appropriations”) bills are introduced.

Fact check this. It is a list of Speakers of the House by year:

Carl Albert (D) 92nd – 94th Congress 1/21/71 – 1/03/77
Tip O’Niell (D) 95th – 99th Congress 1/03/77 – 1/03/87
Jim Wright (D) 100th – 101st Congress 1/06/87 – 6/06/89
Tom Foley (D) 102nd – 103rd Congress 6/06/89 – 1/03/95
Newt Gingrich (R) 104th – 105th Congress 1/04/95 – 1/03/99
Dennis Hastert (R) 106th – 109th Congress 1/06/99 – 1/03/07
Nancy Pelosi (D) 110th – 111th Congress 1/04/07 – 1/03/11

Now compare the Federal deficit by who controls the House (spending) on this handy dandy ‘Chart of Federal Debt’ published in the left-wing rag Esquire Magazine.

http://www.esquire.com/blogs/politics/federal-deficit-graph-071210

You will see that spending increased from the moment Democrats took control of the House in 1955 until they finally lost control of the House in 1995 and note the MASSIVE decrease which caused the “surpluses” IMMEDIATELY coincided with Republican takeover of the House of Representatives, and continued under the Republicans right up until the morning of September 11th, 2001. Wonder what happened then?

But don’t trust me. Go confirm it for yourself. Go straight to the horse’s mouth and hear Clinton tell you WHY *** HE *** shut down the Federal Government to prevent the budget from being balanced by 1997 under the Republican plan – SIX YEARS before he was willing to allow it to be done. Note once again that the President’s *** ONLY *** budgetary power is to VETO appropriations bills.

Because all spending comes from Congress, when a President repeatedly VETOES the Appropriations bills, the government runs out of money and must be “shut down.”

Source – Bill Clinton’s radio address 12/16/95 regarding the House’s proposed 96 budget:

http://www.c-spanvideo.org/program/PresidentialRadioAddress79

According to Clinton, the *** ONLY *** possible way to balance the budget is to follow HIS plan, which is to “balance” the budget by 2003 – 3 YEARS AFTER he has left office. Balancing the budget any sooner, according to Clinton, will:
• Deny Children Health Care
• Deny them Schooling
• Eliminate the School Lunch program
• Deny Children Safe Places to live
• “Deny them Air and Water that is safe to breath and drink”
• Eliminate Head Start
• Cut efforts to keep drugs and violence out of our schools
• Undermine “Our efforts to meet educational standards of excellence”
• End the Americorp program
• Eliminate 350,000 scholarships
• Take away “the Best student loans programs”
• “will raise taxes” – Note, “raising taxes”, in this context is liar speak meaning that because government will not be able pay people’s expenses, they will be forced to pay for things themselves… i.e. Paying for things is a “tax”
• “Children will be exposed to hazardous Waste”
• There will be larger class sizes
• “10 MILLION” people will be “forced to live near toxic waste sites” that “will not be cleaned”
• Fewer children will be immunized
• Millions will be force from Medicaid and onto Medicare adding millions to the Medicare roles
• Millions will be denied adequate medical care
• “1 MILLION people will be forced into poverty”

Listen to it yourself. I entreat you.

…”And THIS is why I William J Clinton will shut down the government by vetoing the REPUBLICAN BALANCED BUDGET AMENDMENT… because “I will not let them hurt our children” 12/16/1995

Note: the dramatic Medicare cuts which Clinton is attributing to child rape, torture, and murder was claimed, by Democrats, to “Slash” Medicare by *** $38.5 billion a year *** for 7 years.

http://www.nytimes.com/1995/09/16/us/gop-s-plan-to-cut-medicare-faces-a-veto-clinton-promises.html

Funny how a greatly exaggerated $38.5 billion Republican cut caused all of that, but when a Democrat (Barrack Obama) cuts over HALF A TRILLION DOLLARS – a.k.a. over FIVE HUNDRED BILLION – from an already insolvent Medicare system, it will only “add efficiency” and cut “waste”.

Liar. Thy name is Democrat.

First I want to clarify I am article OP, not the comment OP – Flagrantbagel. I personally have no love for nor advanced conceptualizations of George Soros.

I am not tricked into thinking billionaires’ have great content of character just because they own some philanthropic organizations.

> “Fact Check this”

Oh, I will.

Deepblue did a massive information dump, which is a handy trick to sound smarter than you really are in debates. I will address this by order of importance of his claims.

Medicare

Romney’s right: Obamacare cuts Medicare by $716 billion. Here’s how.

Sarah Kliff: “The majority of the cuts, as you can see in this chart below, come from reductions in how much Medicare reimburses hospitals and private health insurance companies.”

If Deepblue wants to come back and argue about health care policy, I am more than willing to do that. I personally believe that top hospital administrators need to get paid less in order to tackle the budget problems of administrative bloat. Cutting Medicare reimbursements is a necessary step towards balancing the entitlements portion of the national budget.

I am not happy with how the think tanks lately have been discussing cutting Medicare reimbursement by 40% for Medicare-for-All. That is too steep, too fast and could potentially disrupt services.

The ACA cuts that Deepblue refers to, however, were no where near that drastic and the Medicare-For-All bill at this point is more symbolic than a hard proposal.

Bill Clinton’s Speech

I took up his offer and listened to this C-span speech he linked. From 1995. Since apparently these “Liar, thy name is Democrat” people can’t let Bill Clinton go years later.

The thing about budgets, a fact that that Deepblue skirts, is that they are mostly planned FOR THE FUTURE. Federal, state, local budgets. They are all decided on in advance and don’t kick in as soon as they are passed, except for the immediate money needed to keep services running.

All those bullet points are indeed possibilities of Republican proposed tax cuts. Both now and in 1995. Children, students, and the chronically impoverished are extremely different affected populations than those affected by Obama’s Medicare reimbursement cuts, which are mostly eaten by the hospitals and insurance companies.

“you might want to glimpse at Article I, Section 8, Clause 1 of the United States Constitution”

I have inside info that Flagrantbagel might actually be lawyer. I’m sure he HAS looked at Article I, Section 8 of the Constitution sometime at school.

You do not want to get into an argument about the case law precedent of presidential powers involving taxation with me or Flagrantbagel, Deepblue.

You will not win.

That is all for today.

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NIA Article Comment Reax

I did not anticipate my National Inflation Association article garnering as  much attention as it did.  I’ve had a busy winter.  Apologies for the delay.  There are a lot of comments, mostly poorly thought out and incendiary, so let me try to highlight some of the more interesting ones and clarify my own commentary.

Prof Dave writes:

“In all my years studying economics I have yet to meet a female that understands the basic fundamentals of economics.”

That’s terribly depressing.  Especially for a professor.  He then goes onto to call me a Keynesian, because obviously all I talked about in my post was my desire for the Fed to recklessly print mad cheddar and then take a dump on Milton Friedman’s head.

“Inflation is an increase in money supply leading to a direct devaluation of the currency which in turn leads to an increase in prices and costs. Simply stated the more of a currency that is in circulation the more that is available to speculate in stocks/commodities thus driving prices up, not down as ignorance would have us believe nor is it a supply/demand issue.”

So what is inflation?  Is it the increase in money supply, as Prof Dave suggests?  Is it the devaluation of currency?  Or is it the increase in prices and costs?

In a comment, directed at another member. I cited two macroeconomics textbooks that inflation is the increase in prices and costs.  I’m going to stand by the academic standard and not use the fringe definitions of the Austrian school so popular among my commenters.  Rewriting the definition conflates definition with causation.   (Increase in money supply is the main cause of inflation, most economists believe, but it is not the only cause.)

Printing bills, increasing the money supply, drives long-term inflation.  I get that.  That’s not the point of the post.  I didn’t write a criticism of the NIA as comprehensive defense of the US government’s fiscal and monetary policies.  I wrote it to point out the youtube video’s conclusion of apocalyptic economic disaster was not supported by any thorough data in the video and that the NIA’s interest in the hype was rooted not in a humanitarian effort of spreading knowledge and presenting alternative economic policy but rather in their motive of pimping precious metal stock.

I said that I didn’t know whether gold is a good long term investment or not.  I presented an alternative opinion that existed.  There, of course, was no shortage on the ad hominem bandwagon.  “Using the biased Huffington post as a source? The authors motives are as suspect as the NIA.”  Ew, Huffpo.  Icky liberals are incapable of ever having a meaningful thought.

But you don’t need to the investment expertise of <insert media mogul here> to know that precious metals are not immune to speculation and the entailing consequences.  Silver stocks recently took a fall, something that the National Inflation Association had to admit:

“We never expected silver to rise to almost $50 per ounce so quickly.  Silver simply rose too far too fast and was due for a correction.”

On an interesting sidenote for the all Schiff-heads, as brought to my attention from  rtorre02, Peter Schiff recently called the NIA a “Penny Stock Pump and Dump.

—–

Economics is a difficult science in which a litany of variables exist in constantly evolving system that make it hard for empirical testing to produce consistent models.  Any talk of it can elicit a plethora of everlastings debates about the relationship and extent of government.   These are issues where a single blog post about a youtube video makes a poor discussion forum.

I never stated directly but it’s fairly obviously that I’m of the opinion that the United States is not going to have a Zimbabwe-level hyperinflation crisis.  Not within the next 10 years and certainly not for the sole reason of expansionary monetary policy.  It’s possible, but it would take some severe policy mismanagement that I don’t think is currently occurring or is likely to occur.  (There’s obviously dissent here, but no one thus far has commented on it in the form of a well-researched, cited argument.)

There’s also the logical thinking involved with parsing the argument insinuated by so many that, “Well, Peter Schiff was right about the 2008 financial crisis and the mainstream ‘experts’ were wrong, so Peter Schiff has to be right here.”   There is so much wrong with that line of thinking, for sanity’s sake I’ll leave it at that.

There will always be doom-sayers.  In economics, religion, whatever.  Some will sincerely believe what they preach.  Some will ride the wave of psychosis for monetary gain.  And there will always be those who will fail to question, who give into their own precognitive biases, who dismiss the conventional in lieu of the sensational even when the conventional makes sense.  It may sound hypocritical from a blogger with the intent on stirring the kettle, but really, have some humility sometimes.