Inflation and National Debt (The quick and easy version)

Inflation and National Debt

We hear about inflation and the national debt so much in the news and on news talk shows that we get to where we tune it out and assume we understand what they are talking about. We also may not care what they are talking about and just worry about what is going on in our own little world. I will try not to bore you with too much nerdy information but hopefully explain it better than the news. I will start with inflation first.  Inflation is an increase in the amount of money.  At first glance that doesn’t sound too bad.  Inflating the supply of money seems like it would be a good thing because a lot of us could use more cash.  When we inflate, or print more money we are actually making each dollar go down in value. It would be like adding air to a tire. It looks bigger but it will burst easier because it has less integrity.  When money goes down in value you will need more of it to buy the things you want. Prices rise as a result. When more money is printed you need more of it to buy things because money has less value.  The way we do things now is print more money whether we have gold in the bank to back the money.  When the government wants more, like they always do, they inflate money to get what they want and we re-elect them to reward them for devaluing the money.   Therefore if worse comes to worse you could use your paper money to start a fire to stay warm because it has no precious metal backing it. But if things were that bad I would not trade a loaf of bread for a bar of gold.  So save your money and don’t spend all you have. Hopefully our country will wake up and act responsible.  If money becomes worthless you can use it as kindling.  If you would like to learn more about inflation go to this website. http://www.usinflationcalculator.com/inflation/current-inflation-rates/

Now all of our wants and bail outs by the government have led to a huge national debt with the help of inflating the dollar. The national debt is almost 16 trillion. That is 16,000,000,000,000.  We have heard this number so much it sails right by our dock and never unloads.  When we use the number trillion, it sounds like we are studying space, not money. In his book, What ever happened to penny candy Richard J. Maybury explains it. He says, imagine Columbus when he discovered America. As soon as he stepped ashore he would have had to begin borrowing money at a rate of 20,000.00 per minute and by the year 2010 he would still not have borrowed enough to reach the national debt. (It was 12 trillion at the time he wrote this.)    I still stay it is very important to live on less than what you make or you will have what we have to day, 16 trillion in debt and no plan to get out. Let me know if I can help! We can help our national debt by electing people who want to pay it off.

Tim West

Go West Coaching