George Will uses his latest Newsweek column to warn against the false notion that a little inflation might be the best cure for our economic ills:
Just 18 years of 4 percent inflation would cut currency’s value in half. Furthermore, governments have neither the skill to precisely calibrate inflation at 4 percent nor the will to hold it there. But as an alternative to tax increases that would extinguish economic growth, or to spending cuts that would extinguish political careers, inflation?the surreptitious, slow-motion repudiation of debt?may look to elected officials to be the prudent, or least imprudent, policy.
Briefly pausing in his campaign for a vast new health-care entitlement that would increase the deficit by a trillion dollars over the next decade, Barack Obama recently created a commission to suggest deficit-reduction measures. The commission’s Democratic co-chair, Erskine Bowles, knows bankruptcy: He was on General Motors’ board of directors, a.k.a. the Board of Bystanders, as GM went bankrupt. The commission is supposed to submit its ideas after November’s elections, naturally, but it could issue a seven-word recommendation right now: Stop doing almost everything you are doing.
