It's not a recession!

I accidentally listened to a right wing talk show the other day.

I didn't mean to, i just wasn't in a position to turn it off. I realize the terrible problems that selective media creates, but like everyone else, I still engage in it. We can learn a lot from people we disagree with. We can even learn a lot from people who are wrong. It's important to hear those things. But it's not easy and it's not comfortable. I usually change the station.

The guest on this show was David Stockman, Ronald Reagan's budget director. He is the person most responsible for Reagennomics. The world we live in today is his doing. He INVENTED this economy. Believe me, I didn't want to hear what he had to say. I'm very angry at him and the Reagen clan. I've heard the right winger arguments and they don't make any sense. The host and panel on this radio show however clearly felt they were in the presence of royalty. They were in awe and each and every one of them, especially the host, took time during introductions to express their deep respect and admiration for him.

After a few minutes of worshiping him, they started asking questions about the budget crisis. Almost immediately he said:

"It's very simple, we must cut the defense budget by 26%, preferably more. We must raise taxes on the rich and even the middle class. We must exclude the wealthy from social security. We have no choice. We've gone way too far."

The right wing host, Dianne Rheam, actually cut his mike and said that he "had to leave". The guests were irate. But I thought it was interesting that the guy who invented this hyper capitalist world says we've gone to far. That percolated in my head for a while.

A couple of days ago I read a quote from Warren Buffet, another annoying republican who I normally ignore. He said, "The debt ceiling debate is a red herring. Our current debt is high, but after WWII it was 152% of GDP. This is not that bad."

I've been trying to ignore the media's mindless babbling about the debt ceiling debate. They are flogging a non issue just to further the Republicans selfish agenda. There will almost certainly be a deal, right at the deadline, the only question is how much blood the Republicans can steal from the American people in that deal. If there is NOT a deal, the Republican Party will never recover. They will never win another election if they shut down the government or if they cause a default. Because despite the constant screaming from the far right about how bad government is, most Americans actually like the government. Just ask Newt Gingrich who's career was ended when he shut down the government.

Yesterday I was stuck in a car for three hours and my mind was wandering when it hit me. This is not a recession. This is a POST WAR economy. It's the classic situation, exactly like every other post war period in US history, in European and Chinese history and in the Roman Empire.

Wars cost money. Lots of it. They are the most expensive thing we can buy. And it's awfully hard to time them so that you have money saved up. So you borrow money for your war, and then you pay it back.

Several years ago as part of my job I was trying to track down inflation rates. I found data from Professor Robert C. Sahr at Oregon State University who had calculated the value of the US dollar annually all the way back to 1665. So I grabbed that data and created a graph.

It's very hard to get any usable information, visually, from this graph, because there are two major phenomena that dominate the graph: the relative stability over a long period of time and the massive inflation since WWII.

So to learn anything useful, we have to zoom in.

Now what becomes obvious is that there are periodic spikes, big jumps in inflation, where the dollar's value declined, but fairly quickly returned to a norm. It's fascinating that, ignoring those spikes, the dollar remained at the essentially the same value for 300 years.

Now with what I know about history, i instantly found the timing of these spikes very interesting. So let's label the years.

Yes. Each spike is a war.

We inflated the currency as a way to borrow money, to pay for the terribly expensive wars, and then we paid it back. It's a normal pattern. The Roman Emperors did the same thing. Since Rome was a military dictatorship, each time a general would lead a coup and become emperor, it would cost a lot of money. So they would collect all of the silver coins, melt them down, and add some tin, and make MORE coins than they started with. They inflated the number of coins but sold them for the same amount. They raised more money.

We just bought a four trillion dollar war, we have to pay for it. It's one of the most expensive things we will ever buy. It's like buying a house, you take out a mortgage because it's one of the most expensive things you will ever buy, then you have to change your budgeting for a period of time because you are paying off the house.

We are paying off our decade long $4,000,000,000,000 war. We may not want to, some of us didn't want the war in the first place, i'm not sure it accomplished anything, but we bought it, we took out loans to pay for it and now we have to pay it back.

Some political opportunists on the right are pretending that the reason we are in debt is because of taking care of the American people, but that is just a lie to try to enrich themselves. If government gets smaller, the wealthy can fill the gaps for themselves, but the other 85% of Americans suffer for the luxury of the wealthy.

We are in a post war economy, we've got a big mortgage, but we still have to buy food. To suggest that the problem is social programs is like buying a house, taking out a half a million dollar loan and then looking at your bottom line, seeing that you are in debt and blaming the cat food.