It is humbling to survey the contemporary economic scene and not be able to explain much. Look at how easy it is to create trillions of dollars out of thin air, and how popular it is to hand it out! Well, the latter I can explain. Why didn't the USA develop Weimar Republic-style inflation years ago? What was to stop it?
Compared to what is happening now, the fiscal debauchery of Nixon, Johnson, and FDR looks quaint and archaic. Why did it take politicians and central bankers so long to get serious about the Promethean power of the modern state--of printing your way to prosperity?
Perhaps, at times, the bond market rebelled against money-printing and demanded higher interest rates. Or at times the geezer lobby would have objected to inflation, since they live on fixed incomes. But cost of living increases--based on phony statistics that are in the interests of the government--seem to buy them off.
Of course if you read the goldbug-doom-and-gloom newsletters, you are familiar with all the boilerplate scaremongering about the Chinese eschewing Treasury bonds in the future. Maybe they'll be right someday; but so was the guy who Cried Wolf.
What better way is there for politicians to be popular than to offer instant gratification for all our super-sized appetites; gadgets, boats and RVs, cars and houses, even diplomas. How can a politico lose playing this cynical game. If his policies create a big disaster, the Demos screams for them to DO SOMETHING!!! Of course, that means inflating an even bigger bubble.
