Bachmann Shows Her Economic Ignorance

Michele Bachmann would like for Americans to believe that President Obama is responsible for all of the economic ills that this country is suffering. She completely overlooks the fact that the recession (with its loss of millions of jobs) started under a Republican president -- George Bush. And it was a direct result of the policies Republicans have forced on this country since the administration of Ronald Reagan.

Now she has gone even further and wants to blame President Obama for all of the inflation since 1911 -- a ludicrous suggestion that makes sense only in her own tiny brain. Here is what she told a Town Hall meeting in South Carolina last Wednesday:

The shorthand way of describing to you what quantitative easing is is a license to print money without any value behind it…In the last two years of the Obama administration, if you pull a dollar out of your pocket, you have lost 14 percent of the value of that dollar. That means the federal government has stolen that money from you…They’ve been printing essentially valueless money and flooding it into the money supply. I don’t stand for that. A dollar in 2011 should be the same as a dollar in 1911. A dollar should be worth a dollar.

But she has a solution to cure inflation -- put the United States currency back on the gold standard. In her feeble mind this would make a dollar be able to buy the same amount of things it would buy in 1911 (about 23 times what it will buy today). Obviously she is overlooking a few basic facts.

1. Gold is one of the most volatile of all commodities, and is susceptible to both inflationary and deflationary pressures. Gold is currently at a record high, but that is no guarantee that it won't be worth far less in the future.

2. For a 2011 dollar to be worth the same as a 1911 dollar, there would have had to be 0% inflation for the last 100 years. This is an impossibility in the "free market" so cherished by her Republican cohorts. When shortages occur, there will naturally be an upward pressure on prices (and some shortages, like oil, can affect many kinds of businesses).

3. As the chart above shows, all presidential administrations (including Republican administrations) have experienced at least some inflation. And this happened both before and after this country went off the gold standard in 1971.

All Bachmann has done with this stupid idea is to show that she doesn't understand basic economic facts -- and therefore would not be qualified to be president, especially in such a time of economic disaster as the current recession.