Negative inflation rate


Check out this post at the Globe’s Market Watch blog.  The US is expecting a “negative inflation rate.”  Curious why he didn’t use the more thunderous “deflation” to describe the situation.  Deflation is very very bad for a nation in debt up to its eye balls (and about to spend a trillion more dollars to jump start a car with four flat tires).   It means the price of everything goes down and eventually your wage but debt stays the same.  Same loan, less money to pay it.  This  means more bankruptcies and unemployment.  Those that keep their jobs spend more of what would be discretionary income making their loan payments.  It is a negative downward spiral.

What about Obama’s plan?  While I like all that green spending, he is just moving the country towards bankruptcy.  Just like Canada and my home province of Saskatchewan learned you eventually have to pay that debt and when you do it hurts for a long time.  America will have more debt per capita than we ever had here in Canada and America exported their productive capacity to the rest of the world. 

Despite my liberal tendencies on this issue I don’t think you can spend your way out of recession.  Obama is just going to make this situation worse.

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