Economics For Dummies (Quantitative Easing)

I had decided maybe I was just dumb, but the more I read about the “quantitative easing” our government has been involved in of late, the less it made sense.

You see, I’m a saver and I hate debt.  When the Bible says to owe nothing to anyone except to love them (Romans 13:8), I take it literally.  We have lived well within our means for years so we could save and avoid debt.

So, when I read about quantitative easing I get confused. They say quantitative easing is necessary to avoid deflation and that deflation is bad, but deflation means prices go down and people who have saved can buy things cheaper.

They say they would rather have inflation, where the money you have today is worth less tomorrow. This means people who are in debt today can pay back their debt tomorrow with cheaper money. Inflation rewards people who are in debt and punishes people who aren’t and who have saved.

I thought the government was to support virtuous conduct (saving and moderate, frugal living) and discourage profligate and presumptious conduct (debt-driven lifestyles). I decided maybe I was just dumb, until I saw this video, and now it all makes sense.

Well maybe not, but it’s better to laugh than cry.  GS