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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Jim Cook
April 4, 2008
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POLITICAL MONEY

We came across this excellent quote by David Galland. "It is our contention that the size of the politically motivated governmental spending, spending which has no ‘hard’ limiting factor or defined discipline, will continue apace and, in fact, significantly worsen due to compounding interest on government borrowing and the coming wave of irrevocable social commitments – on Social Security and Medicare. Against the backdrop of a global fiat monetary regime, the only limitation to government spending is that which the politicians believe will be politically unacceptable to a population. This is, generally speaking, no real limitation at all, given that the public is now apathetic about, and numb to, the real world implications of large numbers."

In order to pay for its spending excess, the government must keep taxes high and aggressively create new money and credit. At times, they create money out of thin air to pay the bills. In other words, they monetize the debt. The government also artificially lowers interest rates to feed the monetary expansion. All of this debases the currency. It’s the fundamental reason the dollar’s going down and prices are going up.

This is also why we have speculative excess, and leveraged credit extremes on Wall Street. The government has created too much money. Their monetary looseness has fed an asset inflation and created speculative bubbles. The politicians want easy money. However, too much money makes people egotistical and stupid. Thus, the plight of the overleveraged investment bankers and the foreclosed homeowners who lied about their income.

Once upon a time the U.S. had sound money. None of this current fiasco could ever occur have occurred when our money was made of gold. Gold can’t be created out of thin air. That’s why the politicians got rid of it. They couldn’t pull off their expensive and reckless, vote-buying social schemes with sound money. The price we are going to pay for this folly is ruination. The economist, John Maynard Keynes, once said, "There is a lot of ruin in a country." We are well on our way to finding out how much.