Tuesday, October 6, 2009

Dr. Seuss, inflation and the reinflation of the real estate bubble

It has been eight months since Congress passed the nearly 800 billion dollar "stimulus" bill. We continue to await its effects on the economy in general and on inflation in particular. Most of the stimulus money has yet to be spent by the federal government. There are those who hope that the stimulus money and the $8,000 new home buyers credit will spur real estate sales and, in effect, reinflate the bubble. For those of this mindset, nothing could be better than another round of inflation to restore real estate values and start the good times rolling again. If you are one of those people, remember the old phrase, "Be careful what you wish for."

Most people do not know that Dr. Seuss used to write political cartoons before he produced books for children. I found this cartoon from April 19, 1942 on the University of California at San Diego website.

Dr. Seuss on inflation

Do not be in such a hurry to see the government spend the "stimulus" money. Once Washington begins forcing the money through the economy, you won't like the consequences.

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