I saw someone on TV who claimed that comparing a deeply indebted household with the deeply indebted U.S. government is a false analogy. Why? Because the government, unlike the citizen, has the power legally to print money. No doubt that is true and a point of disanalogy, but what surprised me was that neither the speaker nor his listeners seemed to see any problem with printing money in response to a debt crisis. The problem, of course, is that when a government does this it in effect counterfeits its own currency and reduces the buying power of existing dollars.
This got me thinking about counterfeiting. Why can't I engage in my own private stimulus program? I acquire the requisite equipment, print up a batch of C-notes and then spend them in parts of town that I deem need economic stimulus. Better yet, I simply give out grants gaining no benefits for myself. Is there a difference in principle between illegal counterfeiting and the legal 'counterfeiting' that the government engages in? If they can 'stimulate,' why can't I?
But I'm no economist, so I may be missing something. I guess I don't understand how real value can be conjured out of thin air. In this electronic age, you don't even need paper and there needn't be any actual printing. Suppose the Benevolent Hacker breaks into your bank account, not to transfer funds out or to transfer funds in from a legitimate source, but simply to add zeros to your account. You are suddenly richer 'on paper.' You convert this new found wealth into new cars and houses for yourself. Wouldn't that stimulate the economy to some extent?
And then this morning I saw Krazy Krugman on C-Span, a.k.a Paul Krugman, writer of crappy op-eds for Gotham's Gray Lady, his worst and most vile being this outburst re: the Tucson shooting. Krugman is not at all concerned that the national debt approaches 17 trillion. After all, as he brilliantly observed, the U.S. has its own currency, and it can print money! Not one of the C-Span callers called Krugman out on the consequences of inflating one's way out of debt. Obama, said Krugman, "got cold feet." He didn't stimulate enough!
Meanwhile conservatives stock up on grub, gold, guns, and 'lead.'