What Would Reagan Do?
Just as I felt myself drifting off on the waves of a beautiful dream last night, with a smokin' hot blonde in a black bikini, Ronald Reagan showed up. "Studs, let's have a beer and talk some economic treason, whaddya say?" Being that it was Reagan, I forgot all about the blonde for a minute and said "Sure Ron, whatever you want," and followed him over to Molly Malone's pub.
"We're going to need a lot more than $700 billion dollars to get out of this mess we're in, and there's only one way to do it," says Himself. "Yes, you can hear the words already, can't you? It's time for Voodoo Economics, and not a moment to waste. All those Economical PhD schoolmarms are going to mess their pants, but there's no other choice." Then the blonde showed up at the door, still wearing that little black bikini, and I took my leave. "Until next time!" I told Ron. But I digress.
Voodoo Economics is one of those concepts you can't wrap your arms around, but you know it works. Rather than listen to some professor profess his allegiance to a theoretical guru of greed, you step up to the craps table, you put your money supply on the line, and you start shooting naturals. Just to prove I paid attention to one of those professorial types in the economics class I took back in the day, I'm going to use one of those schoolmarm phrases: acceleration of the growth of the money supply. Still awake? I hope so, this is important stuff.
When the money supply is growing at a nice, safe, positive rate everyone is happy. When the money supply grows too fast, with acceleration well over the speed limit, you get inflation, which is the problem Ron Himself faced back in the day. When the money supply is shrinking, you're dealing with a negative acceleration rate. That's going to be Barack Obama's problem to deal with, and all too soon. Too soon for him of course, not for us, because if these tax-cutting, budget-balancing sycophants stay in power much longer there isn't going to be any money supply at all. But I digress.
Back to the craps table. When you have too much acceleration in the growth of your money supply, you pump up the vig until people stop borrowing to shoot craps. When you have a negative acceleration in the money supply, you pay people to shoot craps. That's right, we're talking Uncle Sam's Negative Am Deposits aka you keep the vig. You simply look Mr. Banker in the eye and say "I don't care about your balance sheet, your treasurer's dirty drawers, or your mother's nest egg, it's time to lend some money." And then for every dollar they lend you give them a dollar of Uncle Sam's Negative Am Deposits. Sounds too simple doesn't it? That's why they call it Voodoo Economics boys and girls. All I can tell you, and this is from the mouth of Ron Himself, is that it works.