This is what politicians actually believe.

Welcome, Hyperinflation, to your new home!

http://en.wikipedia.org/wiki/Hyperinflation

Just when I thought Great Rudd and the Ruling Class couldn't get any more stupid, they go ahead do something like this.

CHRISTMAS is coming, but the cupboard won't be bare. Millions of Australia's cash-strapped families, black and white, are about to get the biggest pay day of their lives.

The money, which comes under a Rudd government package to stimulate the economy, will begin to arrive from Monday.

The sums involved are considerable: parents will receive $1000 for every child in the family (the benefit is means-tested); single carers, pensioners and veterans will get $1400; coupled pensioners, carers and veterans will receive $2100. In some remote Aboriginal communities, where families live in extended kinship arrangements, between $10,000 and $20,000 will be deposited per household.

Luckily enough, Australia isn't in budget deficit yet (or so they tell us). First, some comments, then some maths.

1) This is tax money.
2) The report states that millions of families will receive this benefit.
3) The report further states that these families will be poor families.

4) For arguments sake, let's say that there are one million poor families, each with a single child. According to the article, these families will be given $1000 per child. That's another ONE BILLION dollar bite into the budget surplus. That number is very generous, as a lot of families have more than one kid, there's probably a lot more "poor" families than one million, and the calculation doesn't account for pensioners or veterans.

It's probably not a stretch to say that several billion dollars are going to be distributed in this scheme.

Now, you're probably thinking "So what?! Poor people get an extra buck! Isn't that a good thing?"

My answer would be: for the poor people, maybe, and ONLY in the short run.

Firstly (and you'll scoff at this) Lord Rudd is playing favorites by stealing from the rich (well, everyone, really) and giving to (only) the poor, in true socialist fashion.

Secondly, what happens when these several billion dollars enter circulation? An increase in the money supply. The direct cause of inflation. Prices are going to rise EVERYWHERE, so the benefit that the poor families gain at Christmas is going to be immediately mitigated when prices "stabilise" in January. So, the poor don't gain or loose anything, technically, and the slightly better off people just have to cop the price rise.

Thirdly, and finally, when you tally up this policy with all the other bits of government spending that Divine Rudd wants to introduce, you'll notice that the budget surplus is quickly disappearing. When it finally goes into deficit, we'll have to do what the Americans are doing. First, we'll have to borrow from the Chinese (but seeing as they've already lost all of THEIR cash in the US, they might be reluctant). When that avenue is closed, you know what they have to do? They have to PRINT the money. Poof! Whole budgets out of nowhere!

And the Weimar Republic comes home to Australia.

Oh, and if you think this COULDN'T happen in modern times, watch Mr. Mugabe put a scowl of disapproval on your mug: http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

STAY CALM!!! ALL IS WELL!!!!

Experts agree: everything's fine!!

Paulson says US bail-out working
- BBC News, 12/11/08

"The $700bn (£494bn) US bail-out package has already 'clearly helped stabilise' the financial system, US Treasury Secretary Henry Paulson has said.

But he added that there were still many challenges ahead and market turbulence was likely to continue for some time."

Challenges and market turbulence, like:

US stocks close nearly 5pc lower
- News.com.au, 13/11/08

"US stocks plunged overnight as global markets were rattled by further signs of recession in Europe and a shift in the US financial bailout strategy.

The Dow Jones Industrial Average plummeted 411.30 points (4.73 per cent) to finish at 8282.66 and the Nasdaq dropped 81.69 points (5.17 per cent) to 1499.21.

The broad Standard & Poor's 500 index slid 46.65 points (5.19 per cent) to 852.30.

Since Monday, the Dow has lost 7.4 per cent."

I'm just gonna go out on a limb here and say that maybe this bailout isn't helping. And maybe it'll make things worse. Consider it a prediction.


And an Australian addendum:

Australian market plunges to 4-year low
- ABC News, 13/11/2008

In a volatile day for Australian stocks, the local market has finished at a four-year low after it was unable to recover from a plunge of almost 5 per cent in the first hour of trade.

The All Ordinaries Index has finished the day 5.5 per cent lower at 3,672 points, and the ASX200 dropped 230 points, to 3,697.

The steep falls followed a 5 per cent dip on Wall Street overnight, after US Treasury secretary Henry Paulson decided to use the rest of the Government's bailout package on shoring up banks, rather than bad mortgages.

The last line is odd: it's like the old media thinks the bailout will work if only they could do the right thing with the money they printed. Halfway there, Old Media. Halfway to realising that the best thing Mr. Paulson could do with that money is burn it.

Don't Worry, Be Happy!

It's all so obvious now! The reason the economy isn't improving is because we're all hopeless pessimists, and all we need to do is have a little faith! Why didn't I think of that?!

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Australia can smile away the recession, says Treasury boss Ken Henry
- News.com.au, November 12, 2008

"THE threat of recession could disappear if we all put a smile on our face, the Government's top money man said today.

After two months of persistent bad economic news, Treasury secretary Ken Henry said the worst could be avoided if Australians simply cheered up.

'Fundamentally what is driving weaker economic outcomes globally at the moment is fractured confidence,' Dr Henry said. "