“It is not just an accident that in our age inflation has become the accepted method of monetary management. Inflation is the fiscal complement of statism and arbitrary government. It is a cog in the complex of policies and institutions that gradually lead toward totalitarianism.”

— “The Theory of Money and Credit” by Ludwig Von Mises, 1912

In 2002, Treasury Secretary Paul O’Neill was in a meeting with Vice President Dick Cheney warning him about a looming financial crisis. Part of his worries came from the growing budget deficit that was projected to exceed $500 billion that fiscal year alone. Cheney cut him off mid-sentence. “You know, Paul, deficits don’t matter,” he said. The U.S. budget deficit for 2002 was actually $1.58 billion and our national debt ended up a mere $6.2 trillion.

The thinking by VP Cheney is the brain-child of a macroeconomic theory that has been around since the late 1990s known by its proponents as MMT (Modern Monetary Theory). This theory postulates that any sovereign government can simply print the money it needs to pay its creditors, a process known as monetization. As recognized even by the advocates of MMT, the biggest problem with this kind of economic thinking is the certainty of inflation or potentially hyper-inflation.

Inflation is primarily a problem created by money printing, which causes too many dollars chasing too few goods. Short-run inflation can be caused by anomalies like a gasoline shortage, i.e., in the 1970s when lines formed at gas stations. But long-term inflation is always a governmental mismanagement of monetary policy. Inflation is a pernicious destroyer of a currency and ultimately impoverishes the citizens of that country.

Because most of our eyes glaze over whenever a subject like inflation is mentioned and because our Money Masters understand this, maybe an example will help illustrate how inflation steals our wealth. If a family woke up one day and found out they had the only cow on earth, the value of that cow either to sell or exchange for other needed goods would be immense. The family, being prudent, decides to save their valuable cow until next year when it will be worth even more. Meanwhile, the USDA gets word of this priceless cow and decides to clone it.

Unknowingly, the next year the family discovers that because of the government’s interference in the market, there are now 1 trillion more cows for sale. Sure, they can still sell or exchange their cow for things the family needs; but for much, much less than they could have the year before.

Similarly, the dollar in your bank account has had its purchasing power diluted. Between 2008 and 2012, the Treasury printed somewhere between $3 trillion and $7 trillion out of thin air. It may be more; but because the Federal Reserve refuses to let anybody audit their books, nobody knows how much money has been created. As a reference, this is a trillion: $1,000,000,000,000, i.e. one million million.

We print money to cover our national budget deficit every year. This year’s deficit is projected to be $1.4 trillion. Our national debt will likely top $22 trillion. This is the largest debt ever incurred by a nation in human history. And we are going to pass this bankruptcy down to our children and grandchildren. All debt is present pleasure for a future obligation. Our descendants should look back on us with derision and disappointment.

It is because of this belief in the Modern Monetary Theory that our Congress no longer strives for that archaic idea of a balanced budget. It is the reason someone like Bernie Sanders proposes a health care takeover that would cost our nation $16 trillion or AOC (Alexandria Ocasio-Cortez) can advocate for a delusional project like the New Green Deal with a price tag around $43 trillion. We’ll just print the money.

Every nation from the Greeks to Venezuela have inevitably collapsed because they debased their currency. We will be no different. On the way down, our politicians will think they need to step in to prevent our malady. They will try to solve the problem they created by instituting another government program like higher taxes or, even, price controls. The one solution that would help the most, decreased spending, won’t even be considered by sycophants who need to get re-elected. They’ll continue to burn up those printing presses until the very end.

A few years ago on a trip to New York, my wife and I saw a young lady on the street in a T-shirt that was printed with “What do you mean I’m out of money? I still have my checkbook!” This pretty well sums up our government’s current economic policy.

Come to think of it, and as I reflect back on that young lady, she kind of looked like AOC.

Larry Burden grew up in Boise and has done business management and financial consulting all over America for the past 35 years. Larry now lives in Downey with his wife of 40 years, Dianna, where they have a small accounting practice.