High Prices and Recession, Thanks to BHO

When the government wants to spend more, the GCP (Government Controlled Press) comes out with stories that there is no inflation and in fact there is deflation. The Fed chief, who serves at the pleasure of BHO, may make similar statements. Therefore, say the talking heads, in this environment, government deficit spending is OK.

This blog has stated that the huge increases in government spending create money. Since there is no corresponding increase in good and services to spend the money on, this is certainly inflation. That prices don’t go up is explained by the severe economic downturn. Markets are attempting to clear, that is to sell goods and services and produce more. This is not happening because the inflation is not allowing prices to adjust downward, as is the usual way slow markets clear. The result is a more and more sluggish economy. Based upon the actions of this government, a sluggish economy seems to be what they want, except at election time.