Sarah and Ron are driving while Bob and The Baby sit in back. Bob is holding a crisp 5 dollar bill. Sarah: Bob, are you watching The Baby? Bob: OF course!? That’s what you’re paying me for! As Bob speaks, The Baby gets out of his car seat and begins jumping up and down. The Baby: Momma… Dadda… why Bob need money? Ron: Because Bob never acquired marketable skills and money doesn’t grow on trees! Bob: You majored in performing arts, Ron! Baby: Why not just create more money? Then Bob can have some mo! Seamus pops up out of the back. Seamus: AKSHULLY Everyone in the car screams Seamus: Printing more money can be a very bad idea. It results in the money that we already have losing its value! Bob: Yeah, but so what? Isn’t the government printing money all the time to benefit their interests? That’s better than them taxing us! Seamus: Is it? In the short term, it may seem like it costs you, but in the long term it results in all of your money being worth less than it was before! So it’s basically just a hidden tax! Sarah: Oh… well… that stinks, but we have to pay taxes either way, so what’s the difference? Seamus: The difference is huge! If we weren’t constantly devaluing our own currency, we would be better able to save for the future! A person who starts saving for retirement at 19 could expect their savings to have just as much purchasing power at 65! And they wouldn’t have to invest their money into 401ks and stimulate wall street just to have their hard earned savings retain their value! And with things like cost of living remaining stagnant or even decreasing as technology develops, we wouldn’t have to keep artificially adjusting wages to keep up! Ron: Well that does sound nice and all but I’m sure there are ways inflation can be beneficial! And besides, what’s the worst thing that can happen? Seamus: Hyperinflation! When a government is unable or unwilling to manage the amount of money they print, eventually it begins to inflate so quickly that it becomes almost completely worthless! One of the most infamous historic examples would be- Baby: 1920s Germany? Seamus: Exactly! At one point things got so bad that it would cost you 4.2 trillion german marks to get 1 USD. And there are many more recent examples. In the 2000s, hyperinflation in Zimbabwe was so out of control that the central bank was forced to print 100 trillion dollar bills! And in present day Venezuela, the currency is so worthless that people are using it to make folded paper art and then selling it overseas because that’s the only way they can get a decent conversion for their money! Baby: That… make sense… Ron: Maybe to a BABY! Sarah: YEAH! Economics NERD! Bob: I, as well REMAIN UNCONVINCED! The government should print as much money as it wants and you economics nerds can’t force your beliefs onto me! Bob’s 5 dollar Bill poofs into a 4.5 dollar Bill. Seamus: Told ya so! Everyone: GET OUT OF OUR CAR! https://www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3 https://www.cnn.com/2016/05/06/africa/zimbabwe-trillion-dollar-note/index.html https://www.mercatus.org/publication/government-spending-101/where-does-government-get-money-it-spends

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About this show

Short videos with a punchy, comedic tone and entertaining Socratic characters taking on trending issues and important concepts from a classical liberal perspective, written & animated by Seamus Coughlin.

June 18, 2019

Bob decides that the best way to eliminate poverty is by just giving everyone more money. If the government prints more currency, then everyone will be rich, right?


CREDITS:
Written by Seamus Coughlin & Jennifer Maffessanti
Animated by Seamus Coughlin
Produced by Sean W. Malone

LINKS:
https://fee.org/articles/lessons-of-the-german-inflation/ https://fee.org/resources/prices-soar-with-zimbabwe-inflation/ https://fee.org/articles/how-inflation-drinks-your-milkshake/ https://fee.org/resources/what-you-should-know-about-inflation/ https://fee.org/articles/the-federal-reserve-s-shell-game/