Inflated expectations

Wonder how much play THIS news will get:

Wholesale inflation last year shot up by the largest amount in 26 years while retailers suffered their worst December shopping season in five years as mounting economic woes caused consumers to put away their wallets.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

Whatever could be causing all this inflation? Maybe the fact we're running the dollar printing presses overtime to pay for everything from prescription drugs to Persian Gulf showdowns.

The federal budget suffers from only two problems. The first is that expenditures are expected to rise. The second is that revenues are scheduled to fall. Consequently, the deficit, a not-insignificant $163 billion last year, is set to grow by leaps and bounds for the foreseeable future.

Listening to the Democratic contenders, for example, is like listening to a 4-year-old tell Santa what she wants for Christmas—an array of cherished desires, and no sense that someone has to pay for them. Universal health insurance! Affordable college! Grants for child care! Money for schools! Every doll ever made by American Girl!

Federal spending now amounts to less than 20 percent of our income. ((as if that's a small amount?? Put state and local spending on top of it and you're talking real money! -- Jemison)) The Congressional Budget Office says that given current trends, it could rise to a whopping 56 percent of our income by 2050—more, on an annual basis, than we spent to win World War II.

Less than a decade ago, the federal budget was not just balanced but piling up surpluses. Everyone agrees it was a great achievement. And everyone running for president seems to agree it should never happen again. ((except Ron Paul... even the smart pundits seem to fail to give him credit where credit is due -- Jemison))

Ladies and gentlemen, the intersection of these two stories is the "hidden inflation tax" Paul keeps talking about. It's the secret elephant in the room the power brokers keep hoping nobody ever notices. If the public demanded we stop running deficits and get our financial house in order, why, we wouldn't have the funds to buy voter loyalty or invade small third world countries who annoy us!