Cryptocurrency: Gimmie The Stimmies... Populations Demand Their Own Self-Inflicted Doom

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Economically Ignorant Americans Want More Stimmy Checks To Fight Inflation

https://schiffgold.com/commentaries/economically-ignorant-americans-want-more-stimmy-checks-to-fight-inflation/
https://www.newsweek.com/majority-americans-back-stimulus-checks-inflation-poll-1755636
https://schiffgold.com/faq/what-is-inflation/
https://schiffgold.com/faq/what-is-quantitative-easing/
https://schiffgold.com/peters-podcast/peter-schiff-inflation-insanity-continues/
https://schiffgold.com/key-gold-news/inflation-is-eating-up-your-wage-increases-and-then-some/
https://schiffgold.com/key-gold-news/fiscal-2022-budget-deficit-blows-past-1-trillion/
https://schiffgold.com/interviews/peter-schiff-americans-paying-for-big-government-through-the-inflation-tax/

Proving that most people have no idea what causes inflation, the
majority of Americans in a recent poll said they want the federal
government to hand out stimulus checks to combat inflation.

In the poll commissioned by Newsweek, 63% of the respondents said they
agreed that the feds should issue new stimulus checks to tackle
inflation. Forty-two percent said they “strongly agree” while only 18%
disagreed. Fifteen percent said they neither agreed nor disagreed.

The results of this poll reveal the effects of redefining “inflation.”

Properly defined, inflation is an increase in the money supply. Rising
consumer prices are one symptom of inflation. But the government has
effectively redefined inflation as “rising prices.” In effect, most
people think a symptom of inflation is inflation. As a result, most
people have no clue where inflation comes from.

This was on purpose.

Of course, when you accurately define inflation, it becomes crystal
clear who is to blame — the Federal Reserve and the US government.

Economist Ludwig von Mises explained exactly why this redefinition of
inflation is so pernicious.

    People today use the term `inflation’ to refer to the phenomenon
that is an inevitable consequence of inflation, that is the tendency
of all prices and wage rates to rise. The result of this deplorable
confusion is that there is no term left to signify the cause of this
rise in prices and wages. There is no longer any word available to
signify the phenomenon that has been, up to now, called inflation. . .
. As you cannot talk about something that has no name, you cannot
fight it. Those who pretend to fight inflation are in fact only
fighting what is the inevitable consequence of inflation, rising
prices. Their ventures are doomed to failure because they do not
attack the root of the evil. They try to keep prices low while firmly
committed to a policy of increasing the quantity of money that must
necessarily make them soar. As long as this terminological confusion
is not entirely wiped out, there cannot be any question of stopping
inflation.”

Today, people aren’t even asking the government to fight inflation.
They just want Uncle Sam to hand them money in order to mitigate the
pain of rising prices.

Ironically, stimulus during the pandemic is one of the factors causing
the high prices today.

The Federal Reserve pumped over $3 trillion into the economy after the
2008 financial crisis through quantitative easing.

It also stimulated credit creation with 0% interest rates that lasted
more than a decade. During the pandemic, the Fed doubled down, pumping
nearly $5 trillion more into the economy and dropping rates to zero
again.

The federal government exacerbated the situation during the pandemic
by handing out three rounds of stimulus money, along with trillions in
other aid.

This enabled consumers to keep spending even though they were sitting
at home playing Xbox and not producing anything. With more dollars
chasing fewer goods and services, a massive spike in consumer prices
was entirely predictable.

And that’s exactly what we got. And it hasn’t abated. October CPI came
in at 8.2% on an annual basis.

Meanwhile, wages aren’t keeping up with rising prices. Real average
hourly earnings decreased by 3.0% from September 2021 to September
2022.

It’s no wonder people are clamoring for more stimulus. But it will
only make the situation worse. In the first place, it will put more
dollars in consumers’ hands without any corresponding increase in the
supply of goods and services. That’s a recipe for even more price
increases.

Furthermore, the US government doesn’t have any money to hand out. It
just ran a $1.3 trillion budget deficit. In order to give everybody
stimmy checks, the government would have to borrow more money. The
Treasury market is already reeling due to rising interest rates.
Ultimately, the Federal Reserve would almost certainly have to
monetize that new debt with more quantitative easing. The only other
alternative would be to let interest rates soar, making the interest
payment on the debt even higher.

Stimulus checks might provide a little temporary relief, but they
would ultimately make inflation worse and prices would rise even
higher in the future. But most Americans don’t understand that. They
don’t understand inflation. They just know they’re struggling and they
want government to “make it better.”

The problem is the government never makes it better. It always makes
things worse. And it’s important to remember you never get more
government for free. You always pay.

You’re paying for your COVID stimmy checks today through the inflation
tax. If you get another stimmy check tomorrow, that will mean an even
bigger inflation tax increase down the road.