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Patience Pays; Inflation Steals

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Science suggests our current government is run by lower-achieving members of society. Ironic..

What Is the Federal Reserve? How It Works, What It Does, Why It Matters

One of the more telling scientific studies is that of the “marshmallow test.” You may have heard of it before. An adult tells a child that they can have one now, or in fifteen minutes have two. Then the adult leaves. The simple delay of gratification predicts higher future achievements. For most of those whose job it is to run the government—their actions suggest they picked one.

With the media portraying the government as the hero, it seems to have ingrained in younger generations that instant gratification is the Road to Heaven. Since the Obama Administration, leaders in government have modeled by their actions a way of life that whatever they want, they can have now, and pay for it later.

How could we blame some in society for only copying what is portrayed as heroic?

No matter if it is a government or an individual, eventually the bill comes due. Everyone wants to get paid. Especially creditors. The government can, and does, inflate its income until the kingdom comes, and foots us with the bill. Something an average person would go to jail for. Sometimes the bill is too large.

How the current government has chosen to pay its bills, through rapid deficit financing, destroys the vast majority of the country’s wealth by stealing their savings and inflating their investments. Higher taxes only make this issue worse.

The key distinction between individual debt and government debt is that the government owns the denominated currency. There is an old Wall Street adage: he who hath only a million-dollar loan is controlled by the bank; he who hath a billion-dollar loan owns the bank.

Our government has trillions in loans.

Environments such as higher taxes or losses of real purchasing power, or worse yet, higher taxes and loss of RPP, could only be envisioned as rational by a mindset that grabbed only one marshmallow. The loss of RPP can be evidenced by the rising prices of everyday goods and services.

When we pay more at the pump the worth and value of the gas do not increase. We do not get more MPG from more expensive prices. If increases in the money supply increased productivity, prices would go down, not up. This is putting the proverbial economic cart before the horse.

To have an environment of both inflation and higher taxation leads to less productive economic outcomes that what otherwise could have been. That is, we achieve less. We are all products of the environment we grew up in. Based on science, those in government may have had lower expectations since all they continue to do is choose one marshmallow.

Maybe we should start electing people who went with two.

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[…] party in power. (Sarcasm.) A choir of government officials continues to claim to high heaven that inflation is transitory, as in short-lived. However, it seems transitory is not a measurement of time and […]

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