La Reponse

God it's been forever! yeesh- But I realized that I hadn't finished the last post which was a sort of "riddle".
So did ya pick up on it?
I had a dilemma in the poker game-- how to get my friend in on the action and keep my wealthy friends appeased that they weren't being asked to give a guy money with which to play poker.
I printed up worthless chips and defrauded my other friends into accepting their representation of money---I "inflated" my currency. Everyone's happy (for now) and no one is the wiser, save me. How does this relate to our actual lives? let's see.


Have you ever looked for a definition of the word "inflation"?
As a kid it was something that boggled my mind-- as an elementary school student I basically believed that bills and coins were pumped full of air, and that justifiably angered people. As I got older, by middle school, I knew that it meant you could not buy a candy bar for the same amount of money that one's grandparents remember buying them for, that things just "got more expensive" This didn't make any sense, but no one I asked could help me further my knowledge of it. (especially my teachers!!!) By high school, I still had the same foggy "conception" of inflation, but I was also aware that it was a problem that was capable of starving entire nations, not just disenfranchising the frugal from good candy bars. In college, my economics books and professors informed me that inflation is simply the general rise in prices. But, by the end of high school, I'd already read Anthem, The Fountainhead, and Atlas Shrugged---I knew that there was a definition for the word, and that the one in my economics books amounted to (inflation is no one's fault and is only a pesky effect of market economics, to be anticipated and mitigated using sophisticated charts and graphs, and reliance on the predictions of a mysterious man known as the Federal Reserve Chairman)

The unfortunate thing about all the misconceptions i held is that they are the most dangerous kind of misconception: those that do contain kernels or splinters of insight into the truth--symptoms that can be mistaken for the disease.

Inflation in real life is just what it was in our poker game---money printed to represent worth,value that doesn't exist.
This causes all of the symptoms I noticed ( that I think everyone notices) growing up. When the money suppply (read: the bankroll) is polluted with money that has no worth besides the paper it's printed on, everyone's money loses some worth when they accept it. (Were it not for money, which represents values: goods that are inconvenient to carry or are perishable, or services that don't exist until someone performs them, it'd be almost impossible to commit fraud--nobody's gonna buy a pig they can't see.) Now, candy bars cost more than they did when grammy was a kid, people are angry because they are helpless to fight a change that affects their everyday lives, and they must conclude that such is the nature of money, bitterly.

Why would anyone do something so obviously harmful to everyone, now and into the future?
Why did I do it in the poker game? Answer one question and answer both.
I wanted to help someone less fortunate than myself, and more importantly, I wanted everyone else to help someone less fortunate than they. I didn't have the money to put where my charitable mouth was, and I had to trick everyone else into helping out, since I couldn't guilt them into doing it.

We inflate our currency to give money to people who do not have it, without having to force folks to give it up, which they wouldn't do easily or quietly. Everytime you hear about a new (or old) "social problem" that neeeds a govt program or grant, think back to that huuuuuuge deficit you're always hearing about. (Ignore politicians who claim to have generated a budget "surplus", what they mean, what they know they mean, is that without consideration of the massive deficit, the administration has not run over the budget that they defined for their particular policy agenda. but debt don't just go away)
That gi-normous number you hear that is owed, without knowing to whom or why. How do we fund anything when we are so deep in the hole? Print more money, cover that hole with a roof of straw, and move on. Everybody gets what they wanted, right?
Ask just about anyone today, in a casual, off hand manner, if they think that the poor should be helped. Will they say no?
Ask anyone if they believe everyone deserves a basic education, and help with a college one? Will they say no?
Ask anyone if they believe that no one should ever have to pay for healthcare, just like in Sweden? Will they say no?

People, asked off-hand, will not answer "no" to this question because to do so would suggest ill-will towards the poor and needy. ( which is a larger philosophical issue fer later)
Ask yourself, in light of what i've said about the nature and effects of inflation, if the practice is really good for the less fortunate.
I mean, it makes prices rise on everything, which doesn't hurt the wealthy nearly a much as it does the poor. This in turn makes life harder for the poor, makes a life at the lower end of the income spectrum more bitter and angry, and does not move them at all from the status of "poor", it just extends them some buying power for the moment. And when the prices rise because everyone's money now buys less, because producers must spend more to make the same stuff, buying the basic things for everyday life (it is no accident that economics decides how bad inflation is based on a "goods basket" of arbitrarily collected "necessary" goods) and it also becomes harder for the poor and their children to become producers, because entrepreneurial loans now cost more. (this is why we have an FRC, it was ALan Greenspan's job to decide whether to raise or lower federal interest rates to protect established producer's buying power, or encourage the little guy to become a producer.) Inflation, intended to help the poor, keeps the poor, well, poor. The road to hell is paved with good intentions, and that ain't just an old cliche. Intend whatever you want, if you undertake an action on irrational, poorly thought out, emotionally-driven, i.e. bad premises, you'll likely cause the opposite of your intentions.

The lesson here is manifold--that people truly do need the right to their property, (no inflating away their buying power) that charity is not the first absolute of life , and that lies destroy wealth.

So how do we fix this? How do we get to a society that respects property rights as the first absolute, when we've inflated things out of control? (we're not on a gold standard, so the rate of inflation at this point puts everyone in the red just for having money)
How could we? Everyone's money is worthless in the longterm, and who knows how much different people have lost to inflation, and what will we look to in an emergency? (dependent completely on how stable our economy is, and
9-11, the war on Iraq, and hurricane Katrina should demonstrate that life is full of surprises no matter what--prices are so high, especially on housing, that to lose everything means probably never getting any of it back)
What if you're a kid who needs to get out from underneath his oppressive parents, and while you're willing to work and go to school, it's so expensive that no job you could hold could help you pay for it whle going to classes. The government extends you a subsidized student loan, which is made possible by income tax and inflation again, and you go into serious debt to pay for your education, to be paid for over the years with money that is worth less and less.
How can there be any solution to a problem that distorts every part of life?

To simply try and revert the wealth to its reightful owners is impossible, no one knows who is owwed what, and not all of the debt can be precisely calculated because it cost people time.
To quit the practice cold turkey would force innumerable people into the cold, from welfare recipients to the lower middle class, because their money is worthless and they have little material holding to depend on when that fact is nationally recognised and accepted.
But that's how falsehoods are. When you fake reality, nothing you do is concrete or reliable. One cannot build a house on a foundation of sand without it betraying you after while. You can't lie to a girl about your wealth and your success and ever expect to be able to bring her home to your hovel of an apartment.
To get out of this predicament of ours, it's gonna hurt--but we have to do it, if we hope to eradicate poverty, to raise the standard of living permanently by making more and better products, tools, and services for less, not more.
what'll it be like? I don't know, there're too many variables to consider, but I do know that every single one of them will be unpleasant.