Long-Term Fiscal Deficits May Bring Dangerous Flood Of Inflation

[Geee]

Investors Business Daily:

There is some dispute on who was the first person to come up with one of the most popular forecasts of all time: "après moi le deluge," or, "after me the flood." Was it Madame de Pompadour or Louis XV?

We sometimes use the term in economics to criticize the attitude of those who focus only on the short term.

John Maynard Keynes' famous phrase "in the long term we are all dead" is a good complement.

During the past months and recent weeks, the concern from most who live directly or indirectly from government money has not been the deluge but the fiscal "cliff."

Those who focus on the longer term and outside Washington and New York focus more on fiscal deficits and the potential floods that they might carry.

Inflationary floods have been effective tools to destroy savings and weaken the rule of law.

If we get the worst from both sides, we risk facing the most damaging scenario: falling off a cliff and being hit afterwards with a flood.