There’s a scene in some movie, I forget which one, where the one character is about to do something nefarious to another and they say:
“Don’t move. If I do this wrong it will hurt a little.”
“And if you do it right?”
“It’ll hurt alot.” <evil grin>
That about sums up government’s latest efforts to curb inflation by inflicting ‘pain’ on the average American. In short, the plan is to purposefully throw us into a recession to slow inflation. Trying to purposefully put the US into a recession at this point is like shooting out streetlights to make the sun go down.
First off, given this administrations clueless efforts at economic manipulation, I could totally see them oversteer and give us a depression rather than a recession. But, more importantly, how far down the path have we gone where a recession becomes the more attractive solution an economic problem?
If you never saw ‘World War Z’, a rather bad zombie movie, there’s a scene where the hero realizes that the zombies only attack healthy people. The zombies ignore the diseased and sick. So the hero injects himself with something fatal but curable. He injects himself, walks through the crowd of zombies unmolested, and when he gets to safety he is injected with the cure to what he injected himself with earlier. This economic strategy of purposeful recession to stem inflation is the economic analog to this.
Also, this doesn’t take into account that we’re already in a recession and, surprise, inflation is still a problem. (And, mind you, in the 70’s inflation was calculated in a different way than it is now. If we used the same method we used in the 70’s inflationary period we would see that our current inflation rate is rather significantly higher than what is being reported now.)
As the saying goes, there is no problem so difficult that government cannot make it worse. George Washington died not from illness, but rather from the treatments given to him at the time. It is ironic that Washington (the person) died from treatments meant to heal him from illness, and now we’re looking at Washington (the .gov) inflicting treatments for an economic illness that will beĀ more punishing than the illness itself.
So, even if we weren’t in a recession (but we are, despite the hastily redefined term ‘recession’) we can expect one as .gov tries to stem inflation by any means except the most logical one – stop the free money express.
Inflation is too much money chasing too few goods. At least, thats one of the definitions. By that definition the solution is to either reduce the amount of money being spent or increase the amount of goods. Since we’re still dealing with ‘supply chain issues’ from when .gov mandated businesses close up or run at half-strength, increasing the supply of goods might be tricky. Easier to reduce the amount of available money. How’s that done? Well…youre going to find out. Gov could stop with the handouts (student loans, extended unemployment, etc.) but what are the odds of that. A recession, though….unemployment goes up, people hold onto their money, they stop spending, prices come down, inflation is tamed, and all it cost you was the jobs, homes, and financial security of millions of citizens.
he trick is going to be being one of those citizens who isn’t negatively affected. How do you do that? Shoot, man…you already know he answer to that. Get out of debt. Yes, in periods of high inflation you are at an advantage by paying off debt with devalued money…but you still have to have the money. And if your job suddenly goes tango uniform, the last thing you need is to be sending your remaining dollars to the bank rather than to the grocery.
Get out of debt as fast as you can, buy in large quantities things you anticipate using up over time, try to have more than one revenue source, and spend deliberately and carefully.
Midterm elections are coming, and as unpalatable as this stuff is, it is going to be even worse when the elections are over and they can roll out the stuff that will really get the masses reeling.
Skip the jet ski and new car this year..and next year. Work on your economic resilience instead. There’s gonna be plenty of jet skis and like-new cars at bargain prices being sold by short-sighted sheeple before this is all done.