by John Klar, American Thinker:
It is a mathematical fact that gasoline in the U.S. will eventually rise to $100 for a gallon (perhaps $130 for those interested in higher octane).
This is not fear-mongering, but basic arithmetic and economics. Here’s why.
The price of goods and labor is directly linked to money supply and market factors. This is not merely “supply and demand” economics, but an issue of overheating (or overleveraging) an economy by printing and/or borrowing too much money. When a government prints more money than the underlying economy is generating in real wealth, this is essentially a form of borrowing, often called “debt monetization.”
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The United States has been doing this for decades, staving off the ordinary fluctuations in the economy punctuated by innovations and growth alternating with recessions – borrowing money in times of turmoil softens the blow, but also forestalls the consequences.
This is seen not just in the reckless Biden-Harris spending extravaganza masked by upside-down monikers such as “Build Back Better” or the “Inflation Reduction Act,” but across party lines and even centuries.
Notably, the largely forgotten S & L Crisis of the 1980s under the Reagan administration was never paid off: the proverbial can was simply kicked down the economic road (subject to compound interest, of course). The S & L debacle is estimated to have cost U.S. taxpayers some $132 billion, chump change by today’s debt measures. But that “crisis” caused the collapse of more than 1,000 U.S. banks and the insolvency of the Federal Savings and Loan Insurance Corporation.
That $132 billion in 1980s dollars has not yet been paid off – it was simply rolled into the national deficit, followed by decades of mostly deficit spending by both parties. The 2007-2008 financial crisis is estimated to have cost taxpayers some $498 billion, though President Obama famously lied to taxpayers in 2012, claiming the government recouped “every dime” used to rescue the banks he bailed out. Whatever the actual sum, it remains subsumed in the accumulated national federal deficit of about $35 trillion.
Imagine running a household on infinite credit card debt, and you understand the federal government’s profligacy. But it is much worse than that. When unfunded entitlement obligations such as Medicaid and Social Security are counted, the current total estimated debt of the U.S. government exceeds $100 trillion, and the federal debt to GDP ratio is above 122%. Currency and credit derivatives approximated $90 trillion in 2000, when U.S. Treasury dollars were $3,546,531,560, according to usdebtclock.org; they now exceed $1,576,612,150,000 – 444 times as much printed money in 25 years, far outstripping real GDP growth.
A 2024 Ford F-150 now sells for $36,770 ($73,735 for the Platinum model). Has the truck’s “value” increased, or has the relative value of the dollar simply deteriorated? The answer is a tad of both – these 2024 trucks have more gadgets and extras (the Platinum is a hybrid) than a 1986 Ford F-150, which retailed for $8,373 ($19,587.47 in today’s dollars). But that difference between $8,373 and $19,587 is all inflation, which is accelerating dangerously despite Biden administration deceptions.
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