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Inflation's Stealthy Grip
00:02:07
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| Fiscal responsibility for $20 trillion in debt. | |
| Wow. | |
| With a T. Trillion. | |
| And it just so happens that I'm married to somebody who has worked in accounting for 20 years. | |
| So that's a lot of money. | |
| You know, I hear a lot of people talk about leaving their children with that debt. | |
| That's not how this is going to play out. | |
| This is what happens time and time again in history. | |
| Countries get themselves out of that kind of debt with inflation, period. | |
| It's the only politically feasible way to do it. | |
| They can't tax themselves out of it. | |
| The taxes would be so harsh on people. | |
| They would be voted out of office. | |
| They can't stop the entitlements. | |
| They would be voted out of office. | |
| They can inflate the money and nobody knows. | |
| They don't connect the inflation with the politicians. | |
| And inflation eats away, just as it was in 1980, eats away at productivity. | |
| At first, it makes things look better, and then everything gets more and more difficult to afford. | |
| Your rent goes up. | |
| Your food goes up. | |
| Your salary seems to stay the same. | |
| You can't go on vacation this year like you did last year. | |
| You can't have a big Christmas like you did two years ago. | |
| It eats it away slowly until the point sometimes inflation gets so bad, you have a Venezuela, you have a Zimbabwe, where people know that inflation is bad and they start spending more money trying to stock up and it starts a ball rolling downhill till eventually you're buying loaves of bread with wheelbarrows of money. | |
| It's happening in Venezuela right now. | |
| We had this problem in 1980 and Volcker, the federal chairman back then, raised the interest rates to a point that got the inflation under control. | |
| We can't do that now. | |
| If we raise interest rates, the interest on our debt is going to crush us. | |
| We wouldn't be able to pay it. | |
| We can't get out of this problem like Reagan and Volcker got us out back then. | |