A gigantic armed robbery. Few members of the pundit class have called it that, but according to Independent Institute Senior Fellow Robert Higgs, that is precisely what the $700 billion Emergency Economic Stabilization Act of 2008 boils down to.
To fund the bailout, Americans who had no hand in causing the turmoil that has followed the burst of the housing bubble will be forced to "relinquish substantial amounts of [their] wealth, either directly through ordinary taxation or indirectly through the 'inflationary tax' and the diffuse effects of 'crowding out' in the loanable-funds market, where the government must soon borrow hundreds of billions of dollars more than expected a few months ago," writes Higgs in "A Gigantic Armed Robbery."
The costs may reach as high as an astonishing $2,850 billion, if one includes the Federal Reserve's new Commercial Paper Funding Facility, explains Higgs in "Every Crisis Becomes a Carnival of Opportunism." In view of the commitments already made in various bailout schemes, he continues, "it seems likely that the Fed will have to continue to increase the monetary base rapidly. We therefore face the prospect of stagflation the likes of which we have never seen before, with real output failing, unemployment rising, and prices increasing rapidly. . . . . Somewhere in hell, John Maynard Keynes is laughing manically and dancing a jig."
"Every Crisis Becomes a Carnival of Opportunism," by Robert Higgs (10/27/08)
"A Gigantic Armed Robbery," by Robert Higgs (10/20/08)
To fund the bailout, Americans who had no hand in causing the turmoil that has followed the burst of the housing bubble will be forced to "relinquish substantial amounts of [their] wealth, either directly through ordinary taxation or indirectly through the 'inflationary tax' and the diffuse effects of 'crowding out' in the loanable-funds market, where the government must soon borrow hundreds of billions of dollars more than expected a few months ago," writes Higgs in "A Gigantic Armed Robbery."
The costs may reach as high as an astonishing $2,850 billion, if one includes the Federal Reserve's new Commercial Paper Funding Facility, explains Higgs in "Every Crisis Becomes a Carnival of Opportunism." In view of the commitments already made in various bailout schemes, he continues, "it seems likely that the Fed will have to continue to increase the monetary base rapidly. We therefore face the prospect of stagflation the likes of which we have never seen before, with real output failing, unemployment rising, and prices increasing rapidly. . . . . Somewhere in hell, John Maynard Keynes is laughing manically and dancing a jig."
"Every Crisis Becomes a Carnival of Opportunism," by Robert Higgs (10/27/08)
"A Gigantic Armed Robbery," by Robert Higgs (10/20/08)
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