The Wealthy, The New Inflation Sponge

Common sense suggests that as the government prints more dollars, inflation should become more apparent. But here is what is happening each month: Cell phone companies are withdrawing $10 more from circulation for services, Cable Sports providers probably withdrawing from the economy $40 for every sport fan now. Figure $300 in interest to the banks for credit card interest, and another $300 for health care and car insurance. It is not being plowed back into the financial economic churn, it is being saved.

Food may have doubled in price but few notice it, everyone eats out, and those prices are out of sight. Plus if you can’t cook, why screw up the food? Inflation is invisible to almost everyone.

As the wealthy get richer, their lifestyle doesn’t really increase in spending, the extra goes into the bank. Notice at this point, the money never “trickles down” to the poor people. So in effect the government prints a billion dollars trying to stimulate the economy with inflation and it goes into some rich guy’s bank account and will never see the light of day again, or for that fact circulate in the economy. I could be shot again for oversimplification, but a tremendous amount of printed dollars never make it back into the economy. We use to just have millionaires, now we have billionaires. It takes 1,000 millionaires to make one Billionaire. The sponge inflation factor is being seriously overlooked as if it doesn’t exist. The way the cash has been taken out of the economy is probably what has saved the country from massive inflation so far. These people are far too rich to be able to consume at a level that would lead to product disappearing from the shelves. That is a good thing.

Poor people have no savings, they live paycheck to paycheck. Rich people, let the dollars collect. If there was a better method of delivering dollars to the poor, the economic condition of the poor would have improved years ago. An outright gift to the poor would discourage working for a living.

But what if the country stopped printing dollars? No socialism and a balanced budget. If you’re poor, the cable and the phone drop out of the equation. With welfare and Food stamps gone, you are going to work or starve, drugs become unaffordable as do credit card debts and new cars. The money taxes the rich get off of the poor are now gone. Hmmm

Let’s get government salaries back into line. Why pay them more, if they are now more valuable in private sector, because of training? Let’s endure the inexperience of youth and train government employees on the assumption that if they are any good we will lose them, they will move on to private employment. Keep government wages realistic. And while we are at it, give everyone an equal 35k retirement plan. If you make more, contribute it yourself. I see no reason for a person making 100k a year get a retirement plan geared to his salary. You make more, save more, equal retirement plan for all. Of course that’s probably appears to smack of socialism, but more likely it is just plain common sense. Sadly we seem to be very short of common sense now days, it’s not practical anymore, –How times have changed!