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When the Government Wipes-out Your Money

September 15, 2012

There is financial news from the Chairman of the United States Federal Reserve.  Ben Bernanke will spend 40 billion dollars each month until unemployment falls to 6 percent.  That is what he said, but unemployment won’t fall to that level because of the Feds actions and this is why.

Bernanke will dump 125$ per person into the money supply each month by printing money to buy government debt.  This is supposed to fool all of us into thinking we are so rich that we will buy things and boost the economy.  The problem is that we will have to pay back the loans, either our loans or the government’s loans.  A few years ago, we watched what happened when individuals spent money they didn’t have.  I have not forgotten what happened then.  We lost our jobs, then our cars, and then our houses.  This inflationary economic strategy will sort of work for a while, but then it will be the government’s turn to pay back the loans with our taxes.  Both political parties tried deficit spending for the last 15 years.  If that worked at all then Greece, Spain and Italy should be economic giants rather than international welfare cases begging for handouts.  Still don’t believe me?  We drastically cut government spending at the end of World War II and the economy boomed!Deficit spending didn’t work in the past.  It doesn’t work now.  It won’t work in the future.  Ben Bernanke’s money for debt swap won’t help, though it may create a few months of an inflationary bubble.  Government spending does not create jobs, but it does create political contributions.

There are no jobs because we crushed businesses that hire people and we made it harder for people to start new businesses.  The tax and regulatory costs on businesses are so high  that they don’t care if interest rates are low.  Businesses have to pay back their loans and they can’t make money in the United States at any interest rate.  That is why there are no new jobs and that is what must be fixed if we want to fix the economy.

Some of our politicians won’t understand that simple fact because it goes against their ideology.  They believe they must always expanded government in order to keep their campaign donors happy.  They have the hammer of taxes and regulation, so everything looks like a nail to them.  What we need is someone with a knife to cut government down to size.  I’m sorry, but this is going to hurt for a while.

Does anyone know how to invest in shares of real estate in Texas and British Columbia?


Rob the frustrated

One Comment leave one →
  1. September 15, 2012 12:03 pm

    Reblogged this on catherinephung.


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