Government Programs Cause Inflation.. Absolutely.
By ParaTed2k
@ParaTed2k (22940)
Sheboygan, Wisconsin
March 12, 2009 1:07pm CST
If you want to see what the next "bubble" will be, look at what the government subsidizes most. Everything they subsidize gets inflated until "BOOM", then they run around like the idiots they are, looking for the next problem to cause.
It's nothing new, it's been going on as long as there have been government subsidies... and has caused inflation in that market every time.
Have you ever wonderd why the career fields that used to require apprenticeships or technical training now require at least Associate Degrees? Have you ever looked at your high school diploma and wondered what it really means in the job market?
Until the late 40s (at least in the US), college was reserved for a relative few. It had little to do with career training and never claimed to be. Yes, there were the "professional" fields that required degrees, but the emphasis was put on education, not careers.
What happened? Things like the GI bill and other government programs made college available to Joe Sixpack USA. Now, I'm not against the GI bill so let's not get stuck on the examples. Making college available to everyone who can qualify shot the supply of people with degrees through the roof, especially when you get down to specific degrees. Schools felt no responsibility to monitor demand in the workforce, they simply increased their faculties and departments to meet the new demand in classroom seats.
The result is, "Hello, I'm a Liberal Arts Grad... would you like one of our combos today?"
If you wonder why medical expenses are so high... well, there are several reasons, but you can't overlook the subsidies. Government subsidies makes people on them think that medical care is "free"... which isn't true at all. Since it isn't costing them anything, they often don't give a thought to going to an ER or a clinic when they really didn't need to.
When I ran ambulance, I don't know how many times someone on medicaid or medicare admitted to calling an ambulance instead of driving, taking the bus or a taxi because the ambulance is free.
Of course, in the case of medical care, insurance has the same inflating effect as government subsidies... and for the same reason.
The housing problem we have today happened for the same reason. Government (read taxpayer) backed, risky loans pushed the demand for new homes out the roof. The market was forced to respond to the inflated demand by increasing the supply. Where the supply couldn't keep up with demand, the price of homes rose at breakneck speeds. When the market couldn't sustain the artificial inflation any longer... well... it all went "upside down".
So, next time you wonder why a specific market is going up so fast... Just look to see where the government is throwing money... you'll find your answer.
4 responses
@matersfish (6306)
• United States
12 Mar 09
I'll never understand the left's solution to this problem for as long as I live.
"Oh, our social programs haven't been working? It must be because there aren't enough of them! Let's have more and give them all unlimited funding. That oughta fix it."
Ten years down the road, what happens when 40% more of the population can have a college degree? Of course you want people educated. But whether or not you need college to be educated is another matter entirely. If there are Liberal Arts Grads flippin' burgers now, they'll be on the bread lines in another few years.
Ambo abusers now? Give a "free" ride to another 20-million and any abusers could quite possibly inadvertently kill the needy.
It's a touchy subject, somewhat. And, of course, saying that these programs are failures the way they're set up is cruel because some do benefit. But in my humble opinion, they've been nothing but scams since the '60s.
Healthcare, welfare, scholarship programs, etc. I'm not sure if charity qualifies as a subsidy in your context, but it's definitely financial aid given to the public sector.
1 person likes this
@livewyre (2450)
•
12 Mar 09
I don't know how it panned out stateside, but it was the banks not the Government that pushed the housing market up over here. I don't want to excuse the Govt, but if we're embracing the blame culture then blame where it's due...
The problem has been that the banks lowered the bar for mortgage lending, and the Govt let them get on with it - that's the only way you lay blame - but you would think the banks would be canny enough to make profitable investments, you would think the banks would not be so stupid...Well now we are all thinking again...
Did you know that Marx perfectly predicted the credit crunch??
http://www.thecreditcruncher.com/2009/03/marx-was-right.html
Now I am by no means a Marxist.. or even a leftie... but you have to admit, he knew what he was talking about - the worrying thing is that he states that the inevitable conclusion is a communist state!!
Hopefully things won't get that far, would be fairly ironic after the demise of communism worldwide.. one remaining communist superpower...China, do you know who owns the national debt of the Western economies?? China....
@ParaTed2k (22940)
• Sheboygan, Wisconsin
12 Mar 09
And (at least in the US) why did they lower the bar for mortgate lending? Because The US Government told (first) Freddie Mac and Fannie Mae (then the rest of the loan institutions) that they would back high risk loans with taxpayer money.
Of course Marx predicted it. It's the job of minions to see to it that their lords and masters turn out to be sage prophets. Scummy Marxists like Pelosi, Reid, Barney Frank and "community leaders" like Obama, Ayers and Wright took it as their task to prove Marx right.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
12 Mar 09
That's a way of thinking, but the evidence and the facts show that the government imposed penalties for not making high risk loans, and promised the loan companies that they would back the risky loans with taxpayer money.
True, the loan companies did see the profit they could reap from making them, but if the government hadn't inflicted themselves on the loan companies, there wouldn't have been any profit in it.
@xParanoiax (6987)
• United States
13 Mar 09
Thanks, you put it much more eloquently than I coulda. I really do lay the blame on individuals. Most of the time, government has done alot of the worst stuff over the years because lobbyists and some more insiduous characters through money at our governmental peoples and say, "YO, we'll be mega nice to you if you sign onto this stuff"...they make up some argument in addition to that of course to make it sound good, and yeah that doesn't account for the total reasons our peeps in the gov sign onto the crappy usually un-needed inflation-rendering stuffs, but it is a big chunk of it.
It's a big ol' circle. Everyone does something stupid, it feeds eachothers' problems that're quietly blossoming, no one notices...and then BANG, their "bubble" of dilusion (and money) explodes, and then it's not good for anyone.
And since the government's only there 'cause of we the people, everybody's got a stake in it even more than we would if the government was there of their own accord!
Like I said, you put it more eloquently than I could. xD
@deejean06 (1952)
• United States
12 Mar 09
I think this is a case of the federal government being a figment of the imagination. After all when the people who could have driven themselves or taken public transportation called you in the ambulance to pick them up, it was because the federal government was paying for it. So the federal government is not real. If people actually saw exactly what their money was going to cover or how much was going to a specific program maybe there would be a different mindset?
I consider myself to be somewhat current on news items. I listen to news radio, watch news programs in the morning and evening, and read news online. But I still have no clue - apart from my real estate taxes - where my money is actually being spent. People cannot make the connection with their dots that the money that is being sucked out of their wallets can actually lessen if the "federal government" didn't have all these programs.
@ParaTed2k (22940)
• Sheboygan, Wisconsin
12 Mar 09
Here's a great chart covering just that...
http://www.sniggle.net/Experiment/thebudgetgraphcom500qw9.jpg
@deejean06 (1952)
• United States
12 Mar 09
Thanks so much for the chart but it's too small for me to read - I think that's a bad sign!
