As Obama prints money like Bush did, since they are pretty much the same party these days, American savers will lose money owning long-dated T-bills and cash. In the short run, cash is good, but cash is short-dated T-bills not long-dateds. The cure for the cancer is less lending, and that means higher interest rates on house-buying debt equivalents. The federal gov't, on the other hand, tries ignorantly to spur lending which is the exact wrong thing to do. Let bad companies and foolhardy families crash, the market, charities will come to their aide much more efficiently than taxing savers by making their dollar worthless when the recovery starts. As for the US Fed'l Gov't, they lose money every year, have massive amount of debt, and their revenues are going to drop in real terms for the next couple years at least, and their workforce are all about to retire and request their benefits (Medicare, Medicaid) and pension (Social Security). Does this sound like a company you want to lend money for 20 years? GM is a much better bet, and it's a POS too. The ultimate cure for this Depression should be a Constitutional Amendment making it impossible for the Fed'l Gov't to again leave the gold standard for any reason, not even war, thus reversing the 1971 Bretton-Woods stupidity brought on by Nixon, Kennedy, and Johnson-- the holy triumverate of horrendous leadership. There would also need to be a hard ratio attached to the money-creation vs. gold (and/or other commodity(ies)) in the Amendment, so that gov't officials could lever-up the dollar when they wanted cash to finance a stupid war like Vietnam/Iraq.
$106.06 (02/17/09)
