Hillbama Magic

Politicians are always cautious about raising taxes too fast, for fear of inciting the masses. After all, a revolt could result in their failure to be reelected.

On the other hand, they know that the surest way to be voted out of office is to vote for cutting back on sacred-cow government handouts.

To the rescue: Inflation! Inflation – the government’s practice of indiscriminately increasing the supply of money – provides politicians with a way out.

Why? Because inflation is a hidden tax. By printing up enough “money” to cover the remainder of each year’s deficit (which, as everyone now knows, is of gargantuan proportions), conservative politicians get off the hook. They don’t have to vote for a tax increase.

Liberal politicians, on the other hand, have only two choices: (1) Lie and say that they aren’t going to raise taxes, or (2) just come right out and admit that they intend to do it – which both Barack Obama and Hillary Clinton have done.

Even the latter is a lie, however, because tax increases are always – make that always – sold as taxes on “the rich” only. It’s not until the tax increase is actually implemented that so-called middle-class folks come out of their stupor and realize that they are considered to be rich by liberal politicians. (This is sometimes referred to in finer circles as Hillbama Magic.)

Back to inflation…

Individuals see rising prices as a result of a weakening dollar, but they don’t understand the reason. As a result, not only do they not revolt, they take up the government’s battle cry to “fight inflation.”

And how do you fight inflation? By pointing a guilty finger at all the wrong parties, of course. Which brings about proletariat reactions like, “Gol’ darn it, Maude. Them thar big corporate guys is stealin’ us blind. That O’Reilly feller’s been right all along about them oil dudes makin’ obscene profits.”

When Congress accuses others of causing inflation, it’s tantamount to a bank robber shouting to a bunch of depositors, “The culprits went thataway! Let’s catch ’em and string ’em up!”

The truth of the matter is that for many years we have been experiencing what I would call an “invisible depression,” a depression camouflaged by easy credit. But it’s becoming harder and harder to hide the truth. Regardless of who takes over the reins of power in the upcoming election, there is an excellent chance that he/she will be the unlucky person who just stumbled by when the invisible depression became visible.

What I’m saying here is that if market forces were allowed to prevail, a deflationary depression – much worse than that of the 1930s – would quickly set in. Prices would plummet, and the living standards of most people would dramatically decrease.

That, however, is not likely to happen, simply because Congress is a body of gutless liars. Worse, most of them are themselves ignorant of economic reality.

Someday, I might be tempted to write about some really depressing realities of our suicidal nation-state. Today, however, I’m on a high, so I think I’ll just leave it at that… and end with a few positive words about what all this means to you.

Inflation is bad… and it’s going to get worse. Prices will keep going up… but most people will be afraid to ask for a raise because they’ll be afraid of losing their jobs. And if you’ve been hoping to start a business of your own, you’re probably wondering if you should just forget about it.

“Hey, wait a minute, Ringer,” I hear you saying. “I thought you said you were going to end with a few positive words.”

Hold on. I’m getting to that.

If the current economic crisis puts enough of a scare into you to get yourself moving and actually get started on that business you’ve been thinking about (for how long?)… that’s a good thing. Starting a business of your own – establishing an income you can control – is probably the smartest move you can make right now. Especially if your business idea is in a fairly recession-proof industry.

What do I mean by that? Michael Masterson put it this way in his recent interview with J. Christoph Amberger (“How to Survive – Even Profit From – the Declining Economy“): “In the coming recession, I would want to be in a business that has the following characteristics: (1) positive cash flow, (2) no debt, (3) no accounts receivable, and (4) no merchandise to store. That amounts to a service business or information publishing. Of the two, information publishing is better. In fact, it is the best business to be in for the foreseeable future.”

Information publishing. That’s the business I’m in – and it makes sense to me.

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