The worst of the financial crisis is over we are told. The economy is near its bottom and it will soon bounce back. If you believe this read on:
The U.S. national debt is $11.5 trillion, which is nearly $40,000 for every man, woman and child in America. This means a family of five is $200,000 in debt. But you may be thinking, "So what, I don't have to pay it."
Think again. Bailouts, stimulus plans, weapons and wars are extremely costly and the U.S. debt is already so large, there is no "growing out of it." And as it mounts by the day, the U.S. government has no idea how it will ever pay back its creditors. This leaves only two choices:
1) Tax you what you "owe." This could cost you thousands of dollars a year. And if others can't afford to pay their share, that burden would fall on you as well. But if the government ever tries to collect this money you will see the people revolt, as they lose everything they've worked for.
2) Inflate the currency. The U.S. government has already taken the initial steps as of last September by printing money out of thin air. They see no choice because they can no longer borrow enough money to pay their bills, unless they pay far higher interest rates. Far higher interest rates in itself will sink the economy.
So the government has chosen inflation, not taxation. But when your money loses all of its value, you will still have lost everything you worked for. Inflating its currency is just the spineless way of taking it from you.
What can you do to protect yourself? Please see "Your Money Will Become Worthless" on http://sane-ramblings.blogspot.com/
Until it went war mad and financially insane, America had been the envy of much of the world. However, the work ethic and creativity that built this nation still remains and it will allow the U.S. to rebuild itself on a far sounder footing.
But in the meantime, in the Depression to come, we will do as people did during the Great Depression, we will help one another. And in the end, it is our compassion and our sense of humanity that will make life special, and us a better people.
Dick
1 comment:
Dear Reader,
The U.S. dollar is just paper and its value comes from the confidence Americans and others have in it. If that confidence is destroyed, so will be the value of the paper. Already, China the U.S.'s biggest creditor is "worried" to quote their president. So are the other major U.S. creditors.
What the U.S. is doing with its vast spending on bailouts, stimulus, weapons and wars is not unlike the German Weimar Republic in the early 1920's when they were overwhelmed by the costs from World War l and by demands of the industrialists to help them pay off their loans and for stimulus money to get Germany back on its pre-War footing.
But rather than tax the working class people, who had borne enormous personal hardship during the War and then a lack of jobs after it, in desperation they printed money. Lots of it!
Soon the value of the money spiraled out of control until it took a wheel barrel full of it to buy a loaf of bread.
Since September, the U.S. government has been printing money out of thin air and since March, has picked up the pace. The government is borrowing so much money, that at current low interest rates there are not enough buyers for the debt, so the government is printing money to buy its own debt. This week alone, the U.S. is trying to raise a record $104 billion.
As the U.S.'s creditors see this, they become even more worried.
In the Great Depression, if you had a dollar, it had real value. This time it will be just the opposite. The dollar will steadily lose its value and eventually we will be lopping off zeros. Finally, as we confront our economic problems and start to solve them, we will rebuild confidence among Americans and others, and replace the terribly tarnished dollar with the Lincoln or the Washington.
This is what the Weimar Republic finally did, replacing the Papiermark with the Rentenmark.
In the meantime, Americans will get used to paying for their groceries and other necessities with ever cheapening U.S. dollars and Canadian dollars, Euros, Chinese Yuan, Japanese Yen and certainly small gold coins. The most common gold coin will likely be the Swiss Philharmonic, which are 1/10 ounce gold coins.
This is a sad commentary about a nation much of the world had envied. But these severe problems will shake Americans from their comfort zones and get them angry enough and involved enough to solve them.
Dick
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