The endless debate ongoing in Congress on the budget and its implications for our future has not addressed a problem so potentially serious that it will impact each and every one of us, regardless of our economic status. That pernicious economic cancer is known as rampant inflation. It has destroyed many of the world’s economies. One of the worst cases I have personally seen is the destitute condition of a small African country ruled by a despot these past 23 years. This is Zimbabwe, a country that was formerly controlled by a white minority and exported farming products and had a healthy economy. I have been there numerous times, and in 1990, the Zimbabwean dollar was equal to the English pound. The private sector was stripped of its wealth by force and government decree. And so went the inherent wealth of this once prosperous small nation.
In this country, the Federal Reserve is buying its own debt, thus artificially holding down interest rates and inflation. The tenure of this strategy is coming to a close, as it is untenable for the long term. Congress, this present one, or some future Congress, will be forced to deal with reality and bring costs under control by raising taxes drastically or cutting expenses, barring some sudden explosion in the upward movement of our economy. Under present circumstances, this hardly seems a reasonable possibility.
Ignoring the situation for the long run, Zimbabwe is a standard that is not an improbable outcome.
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Richard S. Kostkas