Washington’s reckless spending statists are desperate to keep people from understanding our inflation problem. As always, they want to pin the blame elsewhere.
The antidote for all of the disinformation is found in a new book by Steve Forbes, Nathan Lewis, and Elizabeth Ames, Inflation: What It Is, Why It’s Bad, and How To Fix It.
When governments — going far back into history — want to spend more than they take in, they resort to currency debasement. The Romans put less and less silver into their coins so they could produce more of them. In Weimar Germany, the government printed up paper money in vast quantities, adding many zeroes to the number of marks each bill was worth. In modern America, the Fed creates money out of thin air to buy up government securities. The result never varies — each unit of money loses value, meaning that prices increase in general.
Forbes, Lewis, and Ames explain how this works in clear English. They also make the important point that generally rising prices are an effect of inflation. The inflation is the excessive creation of money. That leads to rising prices as well as other bad consequences, including the distortion of investment, the loss of trust among economic actors, the erosion of savings, and heightened corruption.
They also take aim at the pernicious notion that “a little inflation” is good for us. The cheapening of money is not economically beneficial, but aids the statists in their plans for increasing control over society by creating an excuse for their spending.
We are going to be fighting the inflation battle for a long time, and you’ll be well armed for it if you read this book.