Early after Obama won in 2008, John Papola asked me what I thought about Scott Sumner’s Money Illusion.  I headed over and got into it.

It has been an ugly 3 years.  But last night I lost a big bet, so….

For the next month or so, I’m going to layout how I let go of my driving political philosophy since the mid-1980’s and adopted Sumner’s.

During this time, I will answer in-depth what I think is the least painful way to take control of America back from the leaders of the have-nots.

For conservatives, particularly now reeling from the correct assumption that the have-nots have been incited to ruin our Republic with their Democracy, I’m here to tell you - the only way out is up.  

Sure, buy guns and (some) gold and move to Texas, but those are just insurance policies against Apocalypse.

What is needed as a strategy is a single conservative policy embedded directly into the fabric of our economy, that assures, “growth.”

This can be accomplished through monetary policy, specifically through a new approach by the Federal Reserve.  

The Fed is on the verge of throwing out their dual mandate, and instead using only one: Nominal Gross Domestic Product on a Level Target (NGDPLT).

Conservatives must rally their political strength to this idea.

Taking Obamaphones and Obamacare from people who don’t deserve things as nice as those who can actually pay for it themselves has now been rendered impossible.  

Just forget about it.  

Instead, the trick is to quickly see INCREASES in new expensive technology advancements, then, the have-nots will have to wait to receive them, while the haves take advantage of them first.

We can Go Gulch, but there’s a smarter trickier way to do it.  If Ayn Rand had been around today, she’d come to understand there is another way.

The answer is NGDPLT.

What this single target does is place US GDP growth on a LASER PINPOINT of X%.

For discussion at this site, I’m going to use Goldman Sachs suggestion of 4.5%.

Quick note to those who also hate Goldman Sachs: Ron Paul Goldbugs and Austrians when being pragmatic will admit that a 4.5% NGDPLT is historically far less inflationary than we have had over the last 100 years.  So if you, like me, are a Kudlow King Dollar fan - this policy is an IMPROVEMENT over what we have now.

When I say a laser pinpoint, what I mean is that GDP on a monthly basis for the next 100 years is a known fact.

GDP will grow by divine Fed Fiat at 4.5% every single year, and once a month, Fed policy will shift slightly to stay dead on that line.  If it misses one month, it will achieve make up the next.

This alone sounds crazy, and I’ll explain it later - suffice to say it is pretty easy because NGDP is made up of Real GDP and Inflation.

4.5% NGDP = X RDGP + Y Inflation

So if RGDP is 3.2% for the year, how much inflation will the Fed allow?

1.3%

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Rather than get into HOW does this work, and the WHY we must do it, and WHAT specifically gets done (all of that comes later), I want to get something else out of the way…

please see my next post Digital Socialism, Atomic Capitalism