Sunday, April 24, 2011

The Case for Inflation: A Progressive way to reduce the deficit and balance the budget...

if the Gold to Dollar exchange rate was:
1 Gold oz = $1,000
3.6 Billion Gold oz would equal $3.6 Trillion worth of spending
2.0 Billion Gold oz would equal $2.0 Trillion worth of revenue
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1.6 Billion Gold oz would equal $1.6 Trillion worth of deficit

if you double the supply of Dollars:
1 Gold oz = $2,000
1.8 Million Gold oz covers $3.6 Trillion worth of spending
1.0 Million Gold oz covers $2.0 Trillion worth of revenue
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800 Million Gold oz covers $1.6 Trillion worth of deficit

Inflating of the Dollar supply requires less Gold to cover the same deficit

Inflate the Dollar supply by a factor of 4:
$1.6 Trillion worth of deficit becomes a mere 200 Million Gold oz

A Progressive policy to spend the flood required to drown the deficit...

You can follow the same economic exercise by replacing Gold oz with barrels of Oil or any other commodity...