Recipes for the Greater Depression

The chair of President Obama's "Catfood Commission" now claims that inaction on containing the federal deficit would be a job killer of massive proportions". So I'm sitting here, wondering: How?

First of all, the federal deficit last year was approximately 6.5% of U.S. GDP. In the worst case, the deficit can be financed by simply printing money -- which would give us a net inflation rate of 6.5% per year. Which is not good, but hardly Weimar Republic style hyperinflation either, we've had 6.5% inflation multiple times within my lifetime and it seemed to have essentially no effect on jobs (much to the disgruntlement of Keynesians, who thought that inflation would inevitably "prime the pump" of greater production, but the Keynesians didn't take into account resource limitations that limit how fast the economy can grow independent of the money supply -- specifically, oil).

So inflation caused by printing money to cover the deficit would not cause loss of jobs. What about these mythical "bond vigilantes" who would drive up interest rates on Federal bonds (and by extension, on all other loans) to the point where the U.S. was bankrupted by interest payments? Well, if they showed up at Treasury auctions, the Fed can step in and buy those bonds. They're denominated in dollars, after all, and the Fed has a very efficient money printing operation set up in its cellars. So the "bond vigilantes" would be shooting themselves in the foot if they showed up, since the Fed could simply inflate their bonds away if the "bond vigilantes" showed up, thereby not only killing their attempt to drive up interest rates but also making their already-owned bonds worth less. So rising interest rates caused by these mythical "bond vigilantes" aren't going to cause the massive loss of jobs predicted by former Sen. Erskine Bowles (R-Crazyville).

So what mechanism, exactly, would cause this loss of jobs? Mr. Bowles doesn't tell us, just that it will happen because, well, because the voices in his head told him so, I guess. Nevermind that the only Depression within the past 100 years (besides the current one) was ended by government spending on a massive scale and accompanied by massive deficits -- that is, World War II, which had average deficits of 25% of U.S. GDP during the course of the war -- that actual, well, history apparently does not exist in the universe where Mr. Bowles lives, where, apparently, WW2 never happened and the Great Depression was ended by magic fairy unicorn dust and Austerians clicking the heels of their ruby slippers together while chanting "Mises is good, Mises is great, Mises is our Savior".

So what will be the effect of Mr. Bowles' recipe of austerity and massive federal budget cuts? Well, what do you think -- it'd be further economic collapse as demand falls even further and more businesses and homeowners default on their loans and more banks collapse and wash rinse repeat. Indeed, in the end I think even cat food will end up being too expensive for the majority of Americans to afford, rendering the moniker "Cat Food Commission" rather ironic. So in that spirit, I will now render one of the recipes for what America will be eating if the Cat Food Commission gets their way...

Cajun Gumbo

Boil or pressure cook 3 or 4 large rats until tender. Pick meat off bones and set aside.
1/2 c. oil
1/2 c. flour
1 lg. onion, finely chopped
1 c. chopped celery
1 bell pepper, chopped
1 gallon broth (from boiling the rats -- you may need to add water to make 1 gallon)

Make a roux with oil and flour. Add onions and celery and bell pepper, cook until wilted. Add water, rat and other seasonings to taste.

Garlic salt & powder
Salt
Black pepper
Dash of Tabasco
Pinch of sweet basil & marjoram

Simmer about 2 or 3 hours. The secret to making a good roux, is to cook and stir until brown as you can get it without burning it. When you add the vegetables, you can brown it even more.

And that's a Cajun gumbo recipe for the Greater Depression that will happen if the Cat Food Commission succeeds in making even cat food too expensive for people to eat. Rat. It's the other dark meat. Enjoy :).

-- Badtux the Snarky Penguin