Sick Cycle Carousel
As history has shown, one of the most damaging things to happen to a country is hyperinflation. The simplest way to explain hyperinflation is when an increase of money comes into a market, the purchasing power of the dollar goes down; when there is so much money in the market that prices skyrocket and money becomes basically worthless. America is coming up short paying for all the programs it is trying to run, so some government officials are increasing taxes and printing new money in order to cover the costs. For instance, in Arkansas, the Private Option was originally projected to only cost $1.9 billion, but new calculations have the cost around $9.14 billion. This is paid by increasing taxes on Arkansas businesses and families, or by taking more federal money.
But where does the federal government get most of its money? Well it comes either out of your pocket through taxes or they just print off new money. The problem with printing off money is that it is fiat currency (not real wealth) and it just represents a certain amount of value. When money is printed, it is not created to match value or worth that already exists, which, makes it harder for everyone to pay for things of value because their dollar is worth less. For example, if person A is willing to trade a watermelon for ten blueberries and no more, the value of that watermelon is ten blueberries. But if government comes along and creates 50 more blueberries, more watermelons can be purchased. Since there are more blueberries available, person B will now charge, say 20 blueberries, for a watermelon because person B must raise the price or else they will run out of their watermelon supply. This leaves person A, who can’t create blueberries, unable to buy any watermelons. And a government official will step in and say “we need to give more blueberries to those who can’t afford watermelons. Let’s create more blueberries so everyone can afford watermelons.” But now the price for watermelons goes even higher because person B will charge an even higher price than before.
This cyclical process caused by government intervention continues to raise the price of goods, because government programs are always willing to meet the cost. Instead of making goods cheaper for everyone in a competitive free market where producers are fighting to meet your demands; now they are fighting to receive the government handouts. As the handouts increase, the value of the dollar in your hand decreases, making it soon worthless.
With programs like the Private Option requiring $9.14 billion to implement, the citizens of Arkansas could very well faced increased taxes along with more federal money that will be coming into the state. Families will find it harder to make their own financial decisions, and instead become dependent on this cyclical process where the state of Arkansas meets the demands of federal government to cover its costs.
If the Private Option is defunded, businesses will compete for your money, not federal money. This competition will weed out the companies that can’t meet the demands of the people of Arkansas and create companies that do. When defunded, Arkansas will be released from the burden of federal dictatorship and be free to make its own choices.