European elections

With the elections in Europe yesterday we now have 9 of the 17 member nations getting new leaders in the past three years. The people have spoken and they want more benefits and printing money to pay for these benefits. They printed up 500 billion last year and are now set for a second stimulus. They still have a way to go to catch up with the US which has printed up about 2 trillion. The theory behind this is based on spending money to fire up the economy which will reduce unemployment and bring in more income from taxes. Then when the economy is booming use the increased taxes to reduce the debt. There is always a first time for everything but in the past we have always increased spending in a bad economy but when things turned around we didn’t use the new taxes to pay down debt but used it instead to start new programs and thus the debt keeps rising. If this idea works and we get back to full employment then inflation will come on like gang busters and many governments are counting on this so they can repay their debt with deflated money. They seem to forget that inflation is the cruelest tax of all and really hurts the poor and those on fixed incomes. Oh well most poor people don’t vote anyway.