Tag: Inflation

The Chicken Heart that Sucks Out Our Souls

Photo by Changbok Ko on Unsplash

The great Stoic Epictetus pointed out that education is the means to freedom.

Unfortunately, education today frequently becomes the means of slavery.

Everyone knows that the cost of higher education keeps escalating. Even the excellent tax advantages of educational IRAs and 529 plans haven’t made it easier to pay for college because education inflation outstrips the plans’ benefits.

A handful of families can afford to pay for their children’s education, but most cannot. So what do those families do?

The children get student loans.

The result? The loans often hound the children into their forties, forcing them to work intensely to pay the principal and interest. Does a man with a snootful of office life and savage commutes dream of what so many great men, from Epictetus to Russell Kirk, lauded: a leisure tinged with slight poverty, a small amount of money but a large assortment of books, a meager stock portfolio but a blooming garden, a mediocre car but lots of time with his children?

Tough.… Read the rest

How to Pay for Thanksgiving Dinner

Are food prices soaring?

Ever since the 2008-2009 crisis, the thinkers, pundits, and writers who ascribe to the Austrian School of economics have assured us that massive inflation was going to start. They assiduously refused to provide a date, but they assured us nonetheless, often suggesting we hoard gold and silver.

I long ago gave up on massive inflation happening. There were just too many countervailing considerations.

Like the United States army. As long as the U.S. dollar is the reserve currency, it has value everywhere in the world. It will continue as the reserve currency as long as the U.S. army is respected everywhere in the world.

The syllogism: If you have the strongest army, your currency has value no matter what. The U.S. has the strongest army. Therefore, its currency has value no matter what.

Here’s how it works. I’m framing this as precisely as I can, while keeping it simple:

The federal government decides it needs money. It prepares a debt instrument that promises to pay $trillion.

The Federal Reserve then adds $trillion to its ledger by keying it into their ledger (literally creating the $trillion from nothing).

The Federal Reserve then gives the $trillion to the federal government in exchange for the debt instrument.

The federal government then disburses the money in various forms, such as COVID-relief packages.

American citizens then take that money (that was created out of nothing and required zero effort) to buy t-shirts, gadgets, Nike tennis shoes, and Catholic religious artifacts that are manufactured (through capital outlays and labor) in China and other countries.

As a result, instead of the $trillion staying in the United States and driving up the cost of goods (the basic law of supply and demand: the more of something you have relative to other things, the less … Read the rest