I think the blowing up of the dollar fear is taking hold a little too soon. Until we begin to see rising employment and/or wages, aspects of CPI will be headed in opposite directions and essentially balance each other out. Energy and food will rise while consumer goods and real assets will decline. Loss of the consumer will send more businesses into bankruptcy and along with the decline in real assets, personal bankruptcy will rise, these along with other deleveraging will eat up dollars at a fast enough pace to offset massive dollar creation for a few years.

I agree that ultimately the goal in DC is to devalue the dollar and inflate their way out of debt, it is the easiest choice and they are politicians first, and the consequences of that, with personal, commercial and government debt levels as high as they are, will be the end of a very long run for the dollar. So for me the concern is how we bring this car to a stop and continue on our journey in a different form of transportation. I for one, with the destruction of the dollar all but certain, would rather see my future customers brought to a stop safely so that they can all be paying for my services in the future.

Ultimately, in an extreme example, we shouldn’t’ play this game of only absolving the debt of bankers, insurers and select manufactures, which is all that is really happening but rather blow the dollar apart by absolving the debt of everyone. After all, to tie into another thread, we have paid for the Navy we have to encourage and protect dollar hegemony, now that that is ending, and while we are still strong relative to the rest of the world, let us control how this economy comes to a stop and insure the health of as many occupants as possible and screw those greater fools who devalued their currencies for years in an attempt to exploit the labor, i.e. wealth, of Americans and now find themselves on the losing side of the dollar trade.

I agree.

And I bet a junkie would not enjoy the reality of a world in which heroin had not been pumped into his system. The unsustainability of the solution is one of its larger flaws. The longer that junkie postpones going through unpleasant withdrawal, the more of he wastes away toward destruction.

If he postpones the withdrawal until after his internal systems have been irrevocably trashed by the abuse, then even withdrawal won’t save him.

If we destroy the dollar in order to postpone an unpleasant market correction, we’ve also destroyed our chances of a healthy recovery in the long term.

Junkies do not usually have exit strategies until they face mortality. Getting hooked on the junk was not the right move in the first place. Exiting NOW is too late, but better than a moment later.

Your post did a good job of pointing out that we have lost 2.8M jobs since the beginning of 2009, and that the stimulus has only [supposedly] “created” 150K. That’s a factor of 20 lost to “created”. And that it cost the government only $112B to do it! I think we both agree that we can point out that the stimulus is a failure, even with the cooked books job creation numbers the administration throws out.

But the “cost per job” metric doesn’t get that across. The “cost per job” becomes a focus point, and one I’ve seen all over the conservative/libertarian ‘sphere. It’s a very similar thing to Congress focusing on executive compensation at big banks when there are severe structural deficiencies that they don’t want to or can’t address. It’s a number, it’s not an argument.

http://images.moneyandmarkets.com/1388/fed_%20flow_of_funds_%20q12009.pdf

My problem isn’t as much with what has been done to date but rather that the intervention didn’t come with an exit strategy, so instead we are simply strengthening the institutions that created the mess hoping they can pull us out.

Secondly, the point of saying that this cost x amount per job is to point out the ridiculous pimping of the stimulus and the number of jobs supposedly created, when in fact we’re losing jobs to the tune of several hundred thousand per month.