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Inflation.us states all government spending inflationary

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Key points:


Cash for clunkers

-Intended to stimulate the economy and reduce carbon footprint

-Glowing news reports


-Paid off vehicles were replaced by vehicles financed by debt

-Caused a shortage of vehicle parts and resulted in an increase in theft of older cars to fill this void

-Auto price inflation (inflation can be thought of as another form of government tax) occured where older cars were in short supply, but the demand for them was still high

-Used vehicle dealers reported that there were less vehicles to purchase and sales were hurt due to the govt stimulated demand for new cars

-mechanics that make a living out of repairing older vehicles have less to work on

-salvage yards couldn't make as much $$$ as the motors of the clunkers were destroyed as part of the program.

-charitable groups noted that the program hurt their revenues (cars can be donated in a similar way to clothing etc)

-rebate chqs were given out on borrowed money.... over a billion.....but who's counting?

-the carbon emmissions it would take to move the clunkers, and the cost to remove coolant, gasoline, and oil weren't considered.

-a Duke University study found that trucks that were purchased would need to be driven for 9 years in order to offset the clunker to new truck trade in emissions

- According to edmunds.com the program cost $24,000 per clunker, not $4K.

cost the taxpayer around $24K per vehicle, not just $4K as the govt estimated

-if people did purchase a new vehicle because of government help, what area of the economy missed out on that money that is now going towards a car repayment?? What part of the economy would have been stimulated due to individual choice?


Video time market 5:20


These are some of the unintended consequences if gov't wants to help.

What if we were to say all government spending were inflationary?

Gov. Ron Paul talks about "inflation tax" which he points out occurs whenever the cost of living increases, then Bernake agrees that inflation is a tax.




What would happen if Freddie, Fannie, FHA and all interference in the housing market were removed? Housing would find it's natural equalibrium sustainable by supply and demand. Simply put government spending causes house inflation.




Nothing is more inflationary than war, producing products in order to destroy them.

Blow back - what the CIA calls it when survivors of collateral damage grow up to be ....evil doers.




College tuition, rising ever since government got involved.

-the consequence of behaviour has been removed with colleges able to raise fees without concern of pricing out students





-force businesses to spend more on not doing business, not hiring, and not creating new services or products.

-regulations are priced into your clothing, food, medicine and pretty much anything you buy causing a "stealth regulation tax" [sic]

-failure is free and also just. A business can fail without regulations. However recently we have seen that it is the regulation who keeps bad businesses in business.


Department of energy - created to end US dependancy on foreign oil. Since it's creation dependance on foreign oil has increased from 50% to 70%

- this department failed its own energy audit 2009




-2.6 million dollars was spent to train Chinese prostitutes to drink more responsibly....by the US government (Why The Face?)

-Road signs costing $300 each are being placed at construction sights to alert motorists that their tax dollars are being spent (creation of jobs at these sites)

-US Forest service is spending $554,000 to replace broken windows in a Mount St Helens visitor centre closed since 2007......and they have no plans to reopen it....




GAO (gov't accountablitiy office) says duplication of programs have run amok:

-342 economic development programs,

-75 international eduction programs, and

-72 safe water programs all have the same duplicate objectives.


GAO also classified 48%of all purchases on govt credit cards as improper, fraudulent or embezzled.


Improper: Xboxes, jewelery, liquor, morgauge payments, gambling, internet dating services, vacations


Government workers paid more than the private sector. Government spending causes an increased demand, waste fraud and price inflation.


Video ends with the request that the next time someone asks for a govt solution please, consider the consequences.













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