Is it possible for the government to spend more money without raising taxes? Sure it is. And they don’t even need to print more dollars.
Geithner’s plan to buy up toxic assets may have been the only solution to untangling the world’s debt, but it is destined to have a massive impact on your bank account next year, and I’m not talking taxes.
The economist George Cooper succinctly presented the three options that central bank governors have in dealing with the current economic crises:
- Do nothing, and allow the free market to ‘purge the rottenness out of the system.’ Cooper says this strategy will almost certainly result in another Great Depression.
- Create another credit bubble, which Cooper argues that this strategy will ‘only delay and amplify the problems.’
- Unleash the inflation monster by either handing out money (bailouts), or by massive government spending (stimulus). Both are funded by raising taxes or printing more money (an indirect form of tax), and both have the impact of saving the borrowers at the expense of the savers.
#3 is clearly the policy the Central Banks of the world are currently employing. What’s interesting is that, with this policy, inflation is inevitable. We can expect, over the next few years, to pay more at the pump and more at the grocery.
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Geithner’s trillions, and why inflation is here to stay
Is it possible for the government to spend more money without raising taxes? Sure it is. And they don’t even need to print more dollars.
Geithner’s plan to buy up toxic assets may have been the only solution to untangling the world’s debt, but it is destined to have a massive impact on your bank account next year, and I’m not talking taxes.
The economist George Cooper succinctly presented the three options that central bank governors have in dealing with the current economic crises:
#3 is clearly the policy the Central Banks of the world are currently employing. What’s interesting is that, with this policy, inflation is inevitable. We can expect, over the next few years, to pay more at the pump and more at the grocery.