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To: Paul Ross
1. The US Government deficit now exceeds US$8 trillion. The ceiling for the deficit has recently been raised again by Congress;

If you don't know the difference between deficit (annual amount) and debt (total accumulated), I have no reason to take any of the rest of your economic theories seriously.

The CPI figure has so little basis in factual reality that it serves only to underscore the age old adage "there are lies, damn lies and statistics". Indeed, this figure is little more than a piece of "voodoo economics" designed to fool the unwitting populace that inflation is only a third or quarter of what it really is.

Serious economists might argue that inflation is really 5% instead of 4%, but to claim that it is 3-4 times higher, or 12-16%, is just not backed up by the evidence.

22 posted on 06/05/2006 10:54:54 AM PDT by KarlInOhio (Never ask a Kennedy if he'll have another drink. It's nobody's business how much he's had already.)
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To: KarlInOhio
Bob Brinker says that inflation in the price of oil is deflationary, net. Why? Fuel spending has a large inelastic component -- you buy so many gallons a year of gas and fuel oil (or KWH and mcf). So people have less to spend on other things.

Wars are usually inflationary. Some wars not. For example the US Indian Wars, I'm guessing, were anti-inflationary. So too, for similar reasons big picture, is the War On Terror.

For example, the Russians are finding that our War in Iraq has just about quenched the Chechnian terrors. Terrorism is a form of coin-clipping, economically. A tax enforced by irregulars -- outlaws, terrs. Inflationary de facto.

We've not only freed Russia from the central oligrachic socialist fascism of the USSR, we've freed it from terror. Very anti-inlfationary, not only for Russia. And for us indirectly in many ways from that benefit to Russia.

Similar to the corruption tax -- the inflation driven by corrupt officials in nearly every non-Scottish Law heritage nation.

26 posted on 06/05/2006 11:09:06 AM PDT by bvw
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