If you don’t know about Jim Cramer, you should. He is a stock-market guru who purports to help the small investor. Some love him; some hate him. He gives some very good investment advice and some very bad investment advice. Unlike most prognosticators, he does apologize for his mistakes.
Right now, he seems to be advocating hyperinflation. That’s right, he’s promoting a policy that will definitely lead to hyperinflation and the end of your wealth. Hyperinflation will make your IRA or 401k become nearly worthless.
The Myth of the “Fiscal Cliff”
A few years ago, a divided US government, for once, took a very responsible step. It agreed in advance to across-the-board cuts in spending. The idea was pretty simple: So-called “conservatives” would never give up their excessive military spending and liberals would never give up their “social programs” that buy votes with taxpayer dollars. So, somehow, they would compromise or, better yet, do the unthinkable – have some responsible cuts in federal spending.
In fact, the cuts that were agreed upon in advance were actually very minimal ones. Much, much deeper cuts – along with massive deregulation and dismantling of wasteful government agencies and programs – will be needed to get the deficit under control and to make an eventual recovery possible. But at least, it’s a move in the right direction.
Why higher tax rates will NOT help
Higher tax rates, which will take effect if the Bush-era tax cuts are allowed to expire, will fail to bring about an increase in total tax revenue. A tax rate increase will not reduce the deficit or the national debt, but rather, it will be counterproductive. High taxes strangle those productive US-based businesses that are still keeping some people employed. What’s the point of risking one’s savings and devoting long working hours to making a profit if most of it goes to the tax man? Small businesses will cancel plans to expand, and many will shut down. Larger businesses will move as many of their operations overseas as they can. The upshot? More unemploymen, less tax revenue, and a bigger deficit.
Well, the Communist Party owns the White House in the person of Barack Hussein Obama. Despite the official outcome of the fraudulent 2012 general election, the Tea Party Republicans still have a certain amount of pull in the House. The Democrats hold a slight edge in the Senate. So, let the spending cuts begin! However, the Washington, D.C.’s big spenders want to keep spending, no matter what. So they coined the new term “fiscal cliff” and they have their shills in the media calling it a crisis. One of those shills, little Jim Cramer, has been using it to talk down the stock market.
Well, there is a dirty little secret that Communists, including those Communists who hold giant investment portfolios, don’t like to admit. Stock markets fear Democrats. All the spin and slanted statistics in the world won’t fix that fear. The market tanked when Obama was elected. Why would we expect it not to tank when he was reelected?
Overspending Is Bad
It is so simple and hard to believe that anyone old enough to vote cannot grasp it, but: You cannot spend more money than you take in. When you put a charge on your credit card, you will get a bill. It works that way for people. It works that way for businesses. It works that way for countries.
According to the Micawber Principle:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Charles Dickens, David Copperfield
America is spending too much money now and has been for many years. Increasing revenue won’t help an overspending problem, any more than winning once in a while will help a gambling problem. The only thing that will work is massive spending cuts.
Hyperinflation Is Around the Corner Absent Massive Spending Cuts
Congress has long felt confident in passing laws that violate the US Constitution, with little fear of those laws being overturned in any way. Congress has not tried to pass laws that violate the law of gravity, YET. Nonetheless, they are trying to pass spending bills that will violate the laws of mathematics and logic. History shows that unchecked government spending always leads to hyperinflation. The clearest example was post-World-War-I Germany, a/k/a the Weimar Republic.
Once a country owes more money than it can ever pay back, no one will continue loaning it money at low interest rates, or perhaps at any interest rate at all. Running the printing presses becomes the only option, and from then on, the inflation begins to feed on itself. The economy ceases to operate and the people are reduced to destitution. At that point, creditor nations will begin seizing the overseas assets of the debtor country and its citizens.
Compromise Is Immoral for the Tea Party
In 2009, many US citizens had had enough. Obama had just been elected dictator and he openly promised to become one of the worst dictators in the history of the world – an pro-Muslim hard-line communist who also pandered to the most doctrinaire eco-freaks. Obama has kept that promise so far, and is working very hard to keep it to this day. That is why many citizens rose up in the Tea Party movement to support candidates to run for office who would refuse to do “business as usual.” They looked for people 100% committed to ending the massive tax and spend policy of the Obama Dictatorship.
If a regular politician goes back on his promise, it is no big deal. That is what we expect. But if a Tea Party office holder goes back on his word, it is the end of the Republic. It means that the people have no representation and no hope. Living in the US will be worse than living in the Soviet Union during the height of the Cold War.
During the Cold War, the so-called “free world” advocated freeing those behind the Iron Curtain, and the great Ronald Reagan did just that. But, who wants to work hard and perhaps put their lives on the line to free the US from the Obama abomination? No one!
Shut Up, Cramer! Give Stock Market Advice and Stay Out of Politics
Back in the 1980s, Ronald Reagan explained what Democrats mean by “bipartisanship.” He said they want you to buy into their partisanship. That is exactly what Cramer is asking us to do, buy into his partisanship. We don’t need a single dollar of tax increases. We need massive spending cuts. Failure to cut spending will result in continued deficits that will eventually bring about hyperinflation.
So, when Cramer and his ilk say “rise above politics,” what he really means is that those people from the Tea Party, who are trying save the US, to commit a highly immoral act by capitulating to the Democrat tax rate increases that will further ruin the economy. By helping to accelerate the ongoing tax-and-spend cycle, Cramer is, in effect, asking that your retirement account be hyper-inflated to worthlessness.
Think it can’t happen in the 21st century?
Welcome to Zimbabwe.