Hillbama Magic

The Coming Economic Depression

By Robert Ringer

The practice of indiscriminately increasing the supply of money gives politicians the ability to have their cake and eat it too. They are cautious about raising taxes too fast, for fear of inciting the masses. After all, a revolt could result in their failure to be reelected.

On the other hand, they know that the surest way to be voted out of office is to vote for cutting back on sacred-cow government handouts. To the rescue: Inflation! Inflation provides politicians with a way out ... and a way into an economic depression.

Why? Because inflation is a hidden tax. By printing up enough "money" to cover the remainder of each year's deficit (which, as everyone now knows, is of gargantuan proportions), conservative politicians get off the hook. They don't have to vote for a tax increase.

Liberal politicians, on the other hand, have only two choices: (1) Lie and say that they aren't going to raise taxes, or (2) just come right out and admit that they intend to do it.

Even the latter is a lie, however, because tax increases are always — make that always — sold as taxes on "the rich" only. It's not until the tax increase is actually implemented that so-called middle-class folks come out of their stupor and realize that they are considered to be rich by liberal politicians. (This is sometimes referred to in finer circles as Hillbama Magic.)

Back to inflation ...

Individuals see rising prices as a result of fiat-money creation, but they don't understand the reason. As a result, not only do they not revolt, they take up the government's battle cry to "fight inflation."

And how do you fight inflation? By pointing a guilty finger at all the wrong parties, of course. Which brings about proletariat reactions like, "Gol' darn it, Maude. Them thar big corporate guys is stealin' us blind. That O'Reilly feller's been right all along about them oil dudes makin' obscene profits."

When Congress accuses others of causing inflation, it's tantamount to a bank robber shouting to a bunch of depositors, "The culprits went thataway! Let's catch 'em and string 'em up!"

The truth of the matter is that for many years we have been experiencing what I would call an "invisible depression," an economic depression camouflaged by easy credit. But it's becoming harder and harder to hide the truth. Regardless of who takes over the reins of power in the upcoming election, there is an excellent chance that he/she will be the unlucky person who just stumbled by when the invisible depression became visible.

What I'm saying here is that if market forces were allowed to prevail, a deflationary depression — much worse than that of the 1930s — would quickly set in. Prices would plummet, and the living standards of most people would dramatically decrease.

That, however, is not likely to happen, simply because Congress is a body of gutless liars. Worse, most of them are themselves ignorant of economic reality. Which leaves only an inflationary depression (perhaps runaway inflation) as an option.

In a runaway inflation scenario, commercial transactions become almost impossible to engage in, because people will not accept paper money in exchange for their goods and services. And because very few people understand the real cause of their financial problems, the move toward a dictatorship begins to look appealing to them. (Adolf Hitler was a charming little example of this.)

Someday, I might be tempted to write about some really depressing realities of our suicidal nation-state. Today, however, I'm on a high, so I think I'll just leave it at that and end on a positive note: Isn't it great that you and I are alive? Hmmm … actually, let me think about that one. I don't want to be accused of jumping to conclusions.

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