Shadow Government Statistics: Hyperinflation could be experienced as early as 2010

[flintlock]

Re: Shadow Government Statistics: Hyperinflation could be experienced as early as 201

I'm not sure if anyone has mentioned this, but I think I found a flaw in Williams' logic concerning hyperinflation. At least I hope so!

He mentions the governments' overwhelming unfunded obligations as what seems to be the primary source of the need to "print money" and hence, the hyperinflation.

But that assumes behavior remaining static while Rome burns around them. Won't things perhaps change as this overwhelming obligation becomes more public and obvious?

The following come to mind as things that might reduce the trauma or greatly postpone a collapse of the nature he's talking about:

1. The federal government will "take back" many of the promises made, such as prescription drugs for the elderly.

2. The social security and medicare obligations could be reduced by raising the ages at which people become eligible. My uncle is 77 and an executive for a major brokerage. My father's been retired since age 56. Why must we, in an age of little manual labor, all have to retire at 65? Working an extra 10 years solves the problem of saving for retirement yourself, while also reducing the amount of SS payments you'll receive.

3. They could (gasp) actually cut spending gradually over time, back to constitutional levels. If the alternative is a complete economic collapse and return to a barter system, politicians might actually be able to sell it to the masses.

4. They could continue to use the bogus CPI numbers to de-facto cut benefits to those already receiving benefits and those due to receive them later.

5. We have a new administration and congress coming in, and may save quite a nice chunk by (smart idea or not) ending the current wars and handouts to "allies" for their support. This looks to be a pretty fast payoff if campaign promises are to be believed.

6. Advances in alternative energy technologies help reduce the trade deficit by spending less on imported oil which has benefits that ripple through the economy.

7. As the dollar falls in value manufacturing things here becomes more attractive and the economy benefits, even if WE don't own the businesses doing it.

8. I'm sure more knowledgeable members could come up with many more ways in which the government/economic machine "self heals" itself to an extent.

I don't hold much hope for these things SOLVING the problem, but what would their effect be on delaying a hyperinflationary collapse? Even a train about to go off the tracks over a fallen bridge can slow down. The engineer may not be able to forestall a plunge into the ravine, but the train will slow if he hits the brake.

While I'm sure some of this "self-healing" will occur, the real problem is the degree that Government dominates the economy these days. A huge percentage of the population now works for, directly or indirectly, the government. Not only are cutbacks in spending not politically acceptable, the ever expanding legions of govt workers demand ever increasing spending, not lower spending. The fact is, a lot of our "economy" is actually just busy work for govt workers. A jobs program. Its not like you can fire half the bureacrats and have them go out and fill a bunch of unfilled jobs in the private sector the next day. I can be done, but it will take time. A long time.

So we are faced with a declining economy, with the reduced tax revenues that go along with that. At the same time more and more people fall into eligibility for some entitlement program. More unemployed, people living longer, the baby boomers retiring, etc. I can only see things getting worse in the near future. America has too much dead weight, period. We live way above our means. And with our system of government, its impossible to change the course politically. I've yet to hear any presidential candidate mention any serious attempt at reducing the size of government. By the time the crisis is at hand, and the need to do so is apparent, it will be too late. At some point, what is to keep our wealthy and productive people here? High taxes and crime?

Hyperinflation? Maybe not, but very high numbers, yes.