What is a bit surprising is how many IRS agents are going to be hired to enforce the new codes: 16,500! Now this is based on a release by Republican congressmen Kevin Brady, so that does make me skeptical. But the release bases the 16,500 number on an analysis by the Joint Economic Committee and the House Ways & Means Committee minority staff. So we’ll have to wait and see. But if Brady is anywhere close to accurate, it would seem to cast doubt on the idea that Obamacare will reduce the tax burden and amount of red tape.

We haven’t seen inflation on the whole during the financial rescue efforts, despite the Federal Reserve’s easy money policies. If you wanted to cherry pick certain assets, the argument could be made that $140/barrel oil, during a recession, coinciding with a dump of liquidity on the economy, could be related. Global oil transactions are denominated in US dollars. It is hard to imagine any other factor being solely responsible for such a historic, and counterintuitive, rise in petroleum during a recession.

Will the massive increase in money cause hyperinflation? I certainly think that high inflation will come when velocity picks up, however, YouTube user ramzpaul makes a good case that given the way our economy is set up, one thing we won’t have to worry about is hyperinflation. For the Austrians out there, it’s worth taking a listen to:

If one group of economic actors can do something, why can’t another? If banks can create money out of thin air to lend, why can’t borrowers create money out of thin air with which to pay back said debts?

Basically, monetizing debt is a process of lending money to one’s self. The government spends, proceeds to write an IOU (debt contract in the form of a T-bill) and hands it to the Federal Reserve.

There are major advantages to 100% reserve banking. Right off the bat, banking panics are simply impossible. Since every bank has all its money on hand (or its customers aren’t contractually entitled to it at that time), there is no way that a run on the bank will cause a bank to go under. And therefore, large banking crises, such as the one we are seeing today, or saw in the Great Depression, or in the panics of 1819, 1837, 1857, 1871, 1893, 1907, etc. would never happen.

While lawmakers rush to “fix” current economic problems, Ron Paul asks us to consider why we’re here in the first place.

Inflation was thus misinterpreted as wealth, leading American consumers to borrow more and more, especially against their overvalued homes. Total mortgage debt in the United States is now around 12.5 trillion, up from $1.5 trillion in 1980! Total household debt was around 50% of GDP in 1980 and is over 100% today. And the personal saving rate was around negative 1%, for most of the last decade.