Back in the Hippie Days of the late sixties and early seventies, there was a saying: Free Love is not Free. This was in response to a society that had embraced the concept of free love. Living together without marriage, which had once been scandalous, was now accepted as the norm. But the older generation wagged their finger and warned against so much sexual freedom. They had a point, because unmarried women still kept getting pregnant, and there was an explosion of STDs. Today, we have a new type of freedom to worry about. A government that’s borrowing wildly to print money, writing stimulus checks every few months, and rewarding those who choose not to work with generous unemployment benefits. But it seems we’re about to learn our lesson: Free Money Is Not Free.
Have you been to the grocery store lately? Supposedly, prices have increased a mere 5%. I don’t know who’s pumping out those figures, but here’s an example: A month ago, I could buy a low calorie frozen dinner for $2.29 cents. Today, that same product was on the shelves with a price tag of $3.59. At the home improvement store, floor covering I bought last year has increased from 54 cents a square foot to 89 cents. To me, these and numerous other price increases are closer to 40%.. All this free money has pumped up demand, creating a scarcity for goods and services..
I don’t know where the fed is coming from. First, Secretary of the Treasury, Janet Yellen. says inflation is “good” for the country. Then, she’s comforts us by predicting that it’s only temporary and prices will soon go back down. I say this lady is blowing smoke , along with Federal Reserve chairman Jerome Powell. They are basing their predictions on events that occurred in previous administrations. None of them have ever been though a pandemic like COVID-19, and they have no more idea of what is going to happen to prices than you and me. .
As a matter of fact, I think the average, middle class consumer has a better handle on the future of our economy that they do, because we’re driving to appointments, going to grocery stores, and buying home improvement items on a day to day basis. We, the ordinary tax payers are paying more for everything because all this free money has created such a high demand. Eventually, taxes will go up to pay for the free money , and so will interest rates. Ordinary people will find they are struggling to pay their bills every month. Many businesses will fail and unemployment will increase.
According to Fortune Magazine, “The economic lockdown, and the gigantic new spending enacted to combat it, brings the day of reckoning far closer. By borrowing multiple trillions at a pace never before seen, the U.S. is endangering the sterling credit that makes Treasuries and the dollar the safest of havens for global investors. It is likely that within the next decade, the U.S. will need to impose monumental tax increases. What America’s leaders aren’t saying is that it’s the middle-class Americans working today, the autoworkers, nurses, and deli owners, and not just their future generations, who’’ll foot most of the bill.”
Free Money Isn’t Free.