Are you guys in the real world!?

Let's see: negative savings rate, 9 trillion government debt, housing market crashing, consumer tapped out on credit card and home equity money, massive trade deficits, virtually all manufacturing moved offshore, GM going under, banks on the verge, etc...you get the point.

And you actually believe government lies about inflation?

What I know is that those huge savings brought about by cheap consumer goods imported from Mexico first, and Asia later, were only fractionally beneficial to the average American.
The rest was eaten up through inflation that benefited only the behemoth state and those that feed off it.

Let me see if I get this again.

I buy a wrench set from China for $5. Then inflation sets in and the value of the wrench set declines.

How does that work exactly?

And where does 4.7% unemployment fit in?

I'm sure it will all be explained along with the declining value of my Chinese wrench set.

If you buy a house and you make $50,000 a year and your house costs you $500,000 how exactly will you survive that mountain of debt?

We have a $13 trillion economy and $9 trillion in debt. How is that a catastrophe?

Industrial production is still about 20 to 25% of the economy. Except we have automated most of the work. Was that a mistake? Most farm work is mechanized - was that wrong?

I will actually believe the sky is falling when I see signs that the sky is falling. What I see is an economy functioning well in some parts and troubled in others. Not rosy, but not a disaster scenario either.

I blame Bush and the neocons for lower taxes.

Frank,

Just to be sure you fully understand the economics involved:

Where do you stand on the Sally question?

Thanks for the plug. The article was also cross-posted at Redstate. I'm interested in what is shown by comments that "take on" the underlying principles of the article.

Frank gets close to a criticism with his use of "fractional", although I'd prefer marginal. At Redstate, jokertim hits on the market basket. "You fail to mention that significant portions of people's spending (mine is over 50%) is on imported, not domestic goods, which rise in cost with a falling dollar."

This I relate to the Dobbsification of the political debate. Lou Dobbs, a purported econ expert employed by CNN is an interesting relic, more comfortable with the political views of a Pat Buchanan than understanding the dynamics of modern markets.

The upshot of their combined argument is, if it isn't made "here" it's bad for "us". This is, of course, an indefensible argument. But popular in some quarters.

My real question is, however, does anybody else see what's going on? Will we be able to force Chinese freeing the yuan? There have been calls for the central bank to step in to "save" the dollar. But isn't it good policy to continue on the policy path we're on?

Talk about Mexico, trade deficits and oil prices are interesting, but not engaging. Stories about models declining contracts dominated by dollars capture front pages. But the policy debate is happening at another level. Is it good policy, or bad policy?

The cartoonish notion that production is only real if raw materials go in one end of a plant and finished products come out the other needs to be re-examined. If one's purpose is to employ people, I would recommend the destruction of all back-hoes and the immediate issue of table spoons. Imagine the jobs we could create!

And, in the short-run, I'm a Sally guy. In the long-run...

Yes, Oregon Guy, I see what's going on here. We are greatly benefiting in the short term from the ingenuity and long hours of Chinese workers, designers, and craftsmen.
But I would only say that it's not in our long term interest to continue using up our feed stock to purchase temporary lifeblood.

We also have benefited from the genius of people like Gates and Job, and yes automation.

But not anywhere close to what we should have, had the government not ripped us off through taxation hidden as inflation.

As to the Sally question -- I'll pass. But I can see why she would be the more attractive kisser.