With the shrinking of the US economy, and it's shrinking very rapidly, you not only have more money, but you also have fewer goods. That's a classic double-whammy on inflation.

I think the inflation prospects for the U.S. over the next five or six, seven years, are quite serious. You cannot have a bumper crop in apples without the value or the price of each apple falling. The Fed has had the largest increase in the monetary base in the history of the U.S., from colonial times to the present, times ten.

It has always amazed me how tax cuts don't work until they take effect. Mr. Obama's experience with deferred tax rate increases will be the reverse. The economy will collapse in 2011.

Let me just try to give you sort of the intuitive one here on the stimulus funds. If you have a two-person economy - let's imagine we have two farms, and that's the whole world, just two farms. If one of those farmers gets unemployment benefits, who do you think pays for him? Am I going way over your heads today?

And just remember, every dollar we spend on outsourcing is spent on U.S. goods or invested back in the U.S. market. That's accounting.

What I'm not saying is that all government spending is bad. It's not - far, far from it, but there is no free lunch, as a former colleague of mine used to say. There is no public tooth fairy. Father Christmas does not work on the Treasury staff this year. You can never bail someone out of trouble without putting someone else into trouble.

The zero-income-tax-rate states have far faster growth in tax revenues than did the states with highest income tax rate over this period.