As you know, one of the big economic fears is inflation. When public debt goes very high, inflation is very popular trick Democrats use to get Republicans elected President. Basically, you print up a whole bunch of dollar bills and dump them into the monetary supply. This is done because the amount you owe somebody stays the same, but you suddenly have a lot more money.
Think of it like this: say you owe somebody about $13 trillion. And all you have is maybe ten. You print up $3 trillion more and now you have enough to pay your debt. Easy! Democrats do this quite often, historically.
Of course, this makes your debtor happy because he gets repaid. And because he is repaid, he now has $13 trillion bucks to spend. And spend it he does! This of course means that a lot more money goes into the available money supply for the country.
But because the approximate net value of an item stays the same, the amount of dollars available to pay for it increases as well. This is why a gallon of milk winds up being $15 each, whereas your granddad paid a nickel for it. The milk isn’t more expensive: the amount of money available to pay for it goes up.
So what, right? Costs go up, but there’s more money to pay for it all.
Not quite. Because your income doesn’t go up very much, and if you’re on a fixed income—like most seniors are—you suddenly find yourself trying to pay $15 for milk when all you have is a nickel coming in. This is what is so bad about inflation: stuff costs more than we can pay for it.
The fix is easy enough: you just reduce the monetary supply before costs go up. Get rid of the money. And even though we’re calling inflation “quantitative easing” lately, the problem is still the same: we need to get rid of that money. But if you wait too long, prices go up, and suddenly reducing money afterword produced deflation…in which no one can afford anything until prices fall again. So you need to get rid of it fast, before prices get affected.
Fortunately, Treasury Secretary Tim “Tim Geithner” Geithner has assembled the best financial minds from his old college fraternity, and they’re producing a sure-fire list of ways to reduce that monetary supply once our debts get repaid. Although not quite complete, the list is going along these lines:
- Build a house or something out of the money, and then set fire to it. Make sure the house isn’t insured or anything, because you don’t want to get a big chunk of money back from the insurance company that puts you right back where you were.
- Give about $500 million to some green technology company and then have the company mysteriously go out of business. It’s an old standby, but we have about five or six more uses out of this trick before everybody catches on.
- Write a big check to China, but date it June 31, 2054. This way it reduces our debt but they can’t cash it, because (a) it’s way off in the future, and (b) there is no June 31st. Dustin over here did that with his gas bill a couple years ago when he didn’t have enough to pay it. The gas company cut off his service, unfortunately, but it’s probably a good bet that China doesn’t know this trick and they’ll have to wait.
- Have a contest on the White House lawn, and see which kid can tear up the most hundred dollar bills in two hours. Invite like a million kids, and intentionally forget to set the timer.
- Chuck suggested the President hire a professional mimic to follow him around all day, like Richard Pryor did in Brewster’s Millions, and pay him a billion dollars. But then Tina realized the mimic would probably spend it on something and put it back into circulation.
- Use fire to fight fire. Buy a lot of Zimbabwean currency with it, and let it lose all its value at a faster rate than the dollar.
- Bury a lot of it in one of those National Parks and say you lost it, like D.B. Cooper did.
- Announce that you’re paying for a wedding. Nobody knows where the hell all that money goes, but it seems to totally disappear.