On Trump's Call for the US to Be More Like the Weimar Republic

Trump supporters would be wise to consider the possibility that he does not actually have access to a hidden room full of brilliant minds. He is what he is. Take this campaign at face value. Trump flip flops. Trump insults.
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I keep hearing from Trump supporters that Donald Trump has access to the most brilliant minds outside of the establishment and that they will help him be a great leader by guiding the way on policy. Aside from the fact that this line of argument is an admission that the candidate himself is not competent, I also have to wonder: just when are these brilliant minds going to show up?

So far on policy Trump has been a flip flopping mess. One day he wants to raise taxes, the next he wants to cut them. First he is "totally pro-choice," and next he is against a woman's right to choose. Last week he suggested that the United States could default on its debt and renegotiate with our creditors. Now, he says the US could never default on its debt because we can just print more money. And, that last bit of flip flopping is what I would like to discuss today: Trump's total lack of understanding of monetary policy.

The idea that the United States can just print $19 trillion dollars to pay off its debt is totally absurd. There is currently about $1.45 trillion in circulation. Can you imagine the inflationary pressure created by the Fed printing $19 trillion more? The value of the dollar would drop and, as I have written here before, the value drop would effect poor and middle class people the most. For people living paycheck to paycheck a drop in the value of the dollar would hurt them in two ways. First, the cost of essential goods would go up. And, second, the earnings on their savings accounts would go down as it costs less to borrow money.

Just a reminder of what inflation is for you Trump voters out there: inflation is a massive transfer of wealth from poor and middle class people to the wealthy. Bankers have controlled inflation through the Fed since 1913 when the Federal Reserve Act was enacted. The fact that we have given so much power over our economy to central bankers is a major flaw in our system. We used to control the supply and value of our money by linking its production to a valuable commodity like gold. Now the value of the dollar is controlled by manipulating its supply and the ease of acquiring it. One of the main downsides to controlling money this way is that it causes booms and busts, hyperinflation and unemployment.

In fact, there is a famous history lesson about the effects of overzealous central banking on a country's economy. You probably remember learning about the Weimar Republic in school at some point. Germany moved off of the gold standard in 1914. That year the German Mark was of equal value with currencies in the UK, Italy and France and traded at four or five Marks to the dollar. By 1923 the German Mark traded at one trillion Marks to one dollar. Prices doubled between 1914 and 1919. And, as prices went up the demand for Marks went up. The German Central Bank met the demand by printing more Marks. At one point they were even printing a one billion Mark note. People did not even bother to get change when they used it. Germany's currency had become worthless.

Simply put, we can not and should not print our way out of our debt problem. If we did try to do so, Trump would usher in the collapse of the United States at a pace that far exceeds the pace we may currently be on. The dollar would be worthless. Unemployment would soar. The poor and the middle class would be devastated.

Trump supporters would be wise to consider the possibility that he does not actually have access to a hidden room full of brilliant minds. He is what he is. Take this campaign at face value. Trump flip flops. Trump insults. Trump often recommends policies that are totally outside of the interests of his voters. And yet, you still support him. What will you do when you learn that Trump actually called for us to print our way out of $19 trillion dollars worth of debt? Will you analyze his proposal seriously or just brush it off as "Trump being Trump?" We need a level of seriousness from our next president that Trump does not possess. And, his call for a return to the Weimar Republic is another reminder of that fact.

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