Arnold Kling uses analogy to explain economic concepts, in this case how government borrowing for spending today works.
Inflation takes place even though the government did not print money. It takes place because government debt creates artificial wealth.
I like the simplifications. Some are easier to follow than others. And the case of government borrowing is one that I find hard to follow. Even the abstract simplifications seem too complex and/or convoluted.
Still, this predictive statement is clear:
Inflation is a form of social strife that results from the government fooling people into thinking that they are wealthier than they really are, by running deficits. It is natural for people to feel upset when the inflation hits.
We’ve been living for some time under the illusion that government borrowing never has to be repaid. But that just means it will be paid for in other ways that are sneakier. And with trust in government being where it is today…
"We’ve been living for some time under the illusion that government borrowing never has to be repaid." Who is this we of whom you speak? Years ago, Ross Perot took a checkbook out of his pocket and held it up at a campaign address and explained that checks have to be covered, that money borrowed has to be paid back and it is the same with the government as it is with each of us. We have to balance our checkbooks. The government just has a higher credit limit. Anyone who thinks we can go on borrowing endlessly is mistaken. We can only borrow as long as someone is willing to lend to us. If the Fed were to print dollars to cover the debt, inflation would be completely out of control and creditors would shut us off because we'd be paying off $100 but they'd be getting much less in value. Ross Perot was on target. The gov must borrow responsibly just as each one of us must do and the bill will come due one day.
Katie is driving home today from her Aunt's funeral. I got the trash out to the curb before the storms last night, although the doggos nosed open the door to escape. The black haired one got lonely so he returned 5 minutes later for a dog treat. The blonde devil ran until he was exhausted. I threatened to leave him outside all night, but eventually dog treat won him over.
I did several household chores, which is dangerous because it signals I actually know how to do them! 🙄
The only thing I didn't do was eat all the spinach rollups (they didn't get packed on Sunday, so we have enough for 20 people).