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WORRIES MOUNT SOARING PRICES HURTING ECONOMIC RECOVERY
Dr. Bob: The government is so dead wrong on this, Brenda, the reason they're saying we don't have inflation, is because we can't afford inflation. If indeed, they were telling the truth everyone on Social Security would get a cost of living adjustment increase and we can't do that because the budget deficit is so high. So instead they measure inflation by the flexible basket of goods and services, a cool political ponzi scheme. Any goods that have prices going up they take it out of the basket and anything that has prices going down, they make it a bigger part of the basket until now, we're the only country that magically has no inflation. And we know the government is absolutely positively wrong and everywhere you look, you have higher prices and inflation is here and even more inflation is in the pipeline.
Gary B. Smith: Exactly, Brenda, a couple of points. One, is there inflation? Yes, there's inflation and it's about 3 or 4 percent, you know, the idea of a cookout going up 30 percent, is absolutely ludicrous. I went to the Safeway today or yesterday, anyway, as a matter of fact, corn, six ears, 99 cents. Hotdogs, a whole packet 1.99, The buns free with the hot dog purchase. My point is, yeah, you might have to go and buy the store brands and you might have to wait for sales, but the point is, yes, there's inflation, but the real question, is it going to have that affect on the economy? No, because we have so much more choices now shall when we walk down the aisle. Week choose to buy to or not buy store brands and I don't think all the inflation that we have, which I said, 3, 4 percent is going to have that effect on the economy.
Jonas Max Ferris: Technically the way that government calculates inflation I wouldn't even say there's 4 percent. However, the perception to the consumer is there's a lot of inflation right now. If you talk to the people in the street they think it's much higher than the official statistics. They don't look at their mortgage payments and food and things we just talked about, gas. If they think there poorer or can't afford things, they can change the behavior and slow the economy down, it might be fantasy, it's food and energy largely, but that's reality and it becomes a reality.
Tobin Smith: With respect to the doctor. I don't believe what he just said. That there is a whole perspective on quote, unquote Inflation is wrong. Inflation is a systemic thing to our entire economy. You have to take everything you can't take the price of hot dogs, particularly commodity driven. Look it, we've had rain, record rain, record droughts and the Mideast blowing up and the dollar going down and the stupid ethanol concept in the United States. All of those things have driven up food prices, but to call that monetary inflation, systemic inflation Dr. Bob you're the economist doctor, that's dead wrong.
Steve Murphy: It's not a threat to the economic recovery. We're not growing fast enough to really have a strong inflationary threat macroeconomic outcome, but what is a huge problem for people who make less money. They can't buy everything.
BEST DEAL EXPECTED FROM BIDEN MEETING: CUT $1 TRILLION OVER NEXT 10 YEARS
Tobin Smith: To pay our debt service right now we have the lowest interest rates we've had really in 50 years. If we were to go to the rest of the worth and say all we can do is cut a trillion dollars over the next ten years, our interest rates for a bond would double and probably triple and say we're insolvent and interest rate debt would go up about $5 trillion over the next 10 years and means the is the trillion dollars is insane.
Jonas Max Ferris: Compared to no cut it's a step in the right direction but it can't even close to the amount we would have to cut to get to a balanced budget. We would have to bring in several trillion dollars over ten years if that's all they're going to cut out of the budget, if we could cut more we can raise taxes less.
Steve Murphy: A trillion dollars now, I'll take a trillion dollars right now. But look, we're looking way too low for the end of this ten year budget cycle. We need to have a balanced budget. To do that we're going to have to do three things. We must decide good economic growth, we must reduce our military commitments around the world and they are bankrupting us we must reform Medicare and can't continue to have this kind of increased cost in Medicare and something has to be done and it needs to be egalitarian and we're going to have to go back to the 1990's level of taxes. And when we have a balanced budget, and a booming economy.
Gary B. Smith: I agreed with him up until the very last line. If you believe in big government you want to take in more revenue and spend more, but the point is this $1trillion is a joke , it's not even going to happen. This will be completely forgotten and our debt, as Toby went through our numbers will be so high by then, forget about Medicare and Social Security.
Dr. Bob: It's a doomsday scenario, and you know, and actually Toby and Gary B are absolutely correct and I have to pause when I say that. They don't know anything about inflation, but they've got this right. Think about a trillion dollars, I don't even want the trillion dollars because think about this, we spend 34 trillion year, so over ten years, if all we do is stay on the same path. One Trillion from that. That means all we can find is 2.9 percent.
CALLS TO CUT AL FOREIGN AID TO PAY REBUILDING IN U.S.
Gary B. Smith: Absolutely. Brenda. This boggles my mind. If you have your own family and you know the kids didn't have enough to eat and the house needed renovations and you went to them and gathered them around, guess what, everyone, I gave the money to the family down the street. Why? They might be friends with us some day and we want them to be friends so you aren't going to have enough to eat but they will. That's just, it just boggles the mind every dollar we take in this country should be spent on fixing this country first.
Steve Murphy: We have a treaty obligation with Egypt that requires that we provide aid to them as part of the Egyptian Israeli peace accords. I think we have to positively engage the region to try to nudge these Arab revolutions in the right direction. I would require these countries to recognize the right of Israel to exist as Jewish state that is a critical foreign policy goal of ours.
Tobin Smith: Well, there are priorities, I mean, part of this idea that the United States being the only super power was supposed to, you know, be all over the world, helping all over the world was sort of the idea we had unlimited resources and that we didn't need to priority advertise and we do need to prioritize.
Jonas Max Ferris: The government is already giving lots of money for all kinds of domestic out puts and they already insure all these people in flood prone areas. Then we say well every year there is a disaster we should give more money and of course it's important, but we don't want to fund it with a tax that will pay for it we're just going to borrow it from China.
Dr. Bob: Yeah, I mean, we're talking about a time of a crisis, and in a time of a crisis this is a family issue. Everyone has to rally around the flag everyone has to do what's right, and if you can't take care of your family you have nothing.
Dr. Bob: Dow Crosses 14,000 by 2012
Gary B. Smith: Google (GOOG)
Jonas Max Ferris: (CXW)
Tobin Smith: Diagio (DEO)