STAGFLATION RETURNS?

If you do not know, stagflation is the combination of high inflation, slow economic growth, and high unemployment rates. We have not seen stagflation in our country since the Jimmy Carter days, but it could be returning as the conditions in the American economy seem just right.

This was predicted by many, many people, but dismissed by the new wizards of Keynesian finance currently running the Fed, starting with Ben Bernanke. Just to be clear, you can't follow easy money policies without consequences. The consequences usually include some type of asset bubble and, if the money is too egregiously easy, inflation. When they are coupled with gross government overspending, the result also is a suppression of private market activity, i.e, low hiring and high unemployment.

Nice jobs, leftists. You got the chance to experiment with our economy and ourselves and, despite the wise warnings of people who knew better, you replicated an ugly episode in American history. At least we're quicker on the analysis that we were in the 1970's.

There is still time to overturn this nonsense, and the budget negotiations are the way to do it. Cut government spending, drastically, now. That will solve the problem of stagflation.

Our economy will be sick until there is a government in place that appreciates commerce creating the conditions where private investors can confidently fund growth. Threat of new taxes, bailouts and government takeovers of businesses create diseased industries. And there's no such thing as healthy "government investment". We need this socialist crew out of Washington pronto.

Stagflation, economic decline and destruction of the American way of life is what we get due to President Obama's economic policies. Not only do we have clowns and people of no integrity leading in Washington D.C., we have people who refuse to admit they are ever wrong. They need to be replaced immediately with competent people of integrity.

Posted in: US