Inflating away debt only works when the obligations are in fixed dollar amounts, like a mortgage. But essentially, all of our long-term fiscal problems are entitlement commitments that grow (are “indexed”) with inflation. When inflation rises, spending on Social Security and Medicare rise at the same rate. So the debt-inflation relationship is the opposite of the get-out-of-jail-free card some envision. Debt still goes up in real dollar terms, creating even more of a death spiral.
Month: April 2010
Math and food.
Don’t click the link unless the following sentence sounds interesting to you.
Assume that a restaurant has N dishes on its menu that are rated from worst to best, 1 to N
Reagan did it.
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| The Big Bang Treaty | ||||
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Don’t write this off because it came from The Daily Show. When someone’s right, admit they are right. Fox News is crazy.
EXTRA! EXTRA! SENSATIONALISM INACCURATE!
Last year we saw, in one instance, how sound-bite reporting can go wrong. Among the 12,830 words in the annual letter was this sentence: “We are certain, for example, that the economy will be in shambles throughout 2009 – and probably well beyond – but that conclusion does not tell us whether the market will rise or fall.” Many news organizations reported – indeed, blared – the first part of the sentence while making no mention whatsoever of its ending. I regard this as terrible journalism: Misinformed readers or viewers may well have thought that Charlie and I were forecasting bad things for the stock market, though we had not only in that sentence, but also elsewhere, made it clear we weren’t predicting the market at all. Any investors who were misled by the sensationalists paid a big price: The Dow closed the day of the letter at 7,063 and finished the year at 10,428.
2009 Berkshire Hathaway Letter to Shareholders
Don’t trust outrageous claims from anyone.