Watch out! At this very moment, professional economists of all stripes are making plans on your behalf. They’re dreaming and scheming new and innovative ways to spend your money long before you’ve earned it.
While you’re busy at the gristmill, grinding away for clients and customers, claims are being laid upon your life. Your future earnings are being directed to boondoggles galore. Yet these claims are in addition to everything Washington’s already signed you up for.
At last count of the U.S. National Debt, every American citizen’s on the hook for nearly $70,000. Add U.S. Unfunded Liabilities – which includes Social Security, Medicare Parts A, B, and D, federal debt held by the public, plus federal employee and veteran benefits – and each citizen owes almost $383,000. And this sum’s going to double in the years ahead faster than you can say lickety-split.
These professional economists, enamored by the genius of their graphs, see tomorrow’s recessions and know just how to prevent them. Their master plan for reversing a recession before it strikes amounts to pre-emptive stimulus. Continue reading
“This feels very sustainable.” – Federal Reserve Chairman Jerome Powell, October 8, 2019
Under the Influence
Conflict and contradiction. These were two of the main themes reverberating around the world of centralized monetary planning this week.
On Tuesday, for instance, a novel and contradictory central banker parlance – “reserve management purposes” – was birthed into existence by Fed Chair Jay Powell. We’ll have more on this later on. But first, to best appreciate the contradiction, we must present the conflict.
Free of government intervention, the economy and financial markets would get along within a low standard deviation. Extremes would appear from time to time. But they would be quickly reconciled and balance would be restored within the normal distribution of the mean.
Free of government intervention, an agreeable stability would be maintained. Continue reading
This week central planners pursued their primary mission with steadfast conviction. They planned. They prodded. They prearranged tomorrow to save us from ourselves. Some also grubbed a little graft for their trouble.
Other central planners took to debasing the dollar to price fix the federal funds rate within a narrow band of tolerance. What in the world do they think they’re doing?
We know from our own everyday experience that people make choices. What’s more, these choices do not occur in isolation. There are a myriad of influences and constraints factoring into the countless choices people make as they go about their day.
One person drives their car to work. Another takes the train. While a third walks. These choices may be individual preferences. But they’re also subject to other factors – like proximity to work or the train station, the price of gas, the cost of parking, and much, much more.
Perhaps central planners can account for some of these influences and constraints. But not all of them. Not even half of them. Continue reading