Thursday, September 9, 2010

Where does the government get its money?

It doesn't matter how many times you attempt to spend your way to prosperity, the results are always the same.

An individual cannot spend his way to prosperity, nor can a family, nor can a city, nor can a state, nor can the country as a whole.
Spending way more than you take in month after month, year after year, only leads to one thing: eventual bankruptcy.
Do you really believe that the government can spend the country back to the days of prosperity? I don't.

Question: Where does the government get its money?

Answer: From the people.

So when the government takes money from the people in order to spend that money on "stimulus" programs, that same amount of money is no longer available to the people for their own spending.
Of course, the government can claim that the source of their "stimulus" money is not taxation from the people, but is instead borrowing from investors.

Uh-huh. And who repays the money that the government borrows?

Answer: The people.

The money that government spends in order to "stimulate" the economy always ultimately comes from the people.
So how can the government take money from the people, spend it, and then claim that it boosts the economy, when now the people have that much less themselves to spend in the economy?
Answer: There is no boost to the economy, any more than taking money out of your Bank of America savings account and depositing it into your Chase savings account will boost your net worth.
Let me make it clear, there is no net gain in the economy by government taking money from the public and spending it, because now the public has that much less to spend.

The only gain is to the politicians and their crony "capitalist" friends who receive the lion's share of the new government spending.

But There is NO Overall Gain
to The Economy.

Yes, our leaders bought some time and temporarily slowed the rate of economic deterioration with their gluttonous "stimulus" spending. They didn't solve any problems (other than the problem that Wall Street's billion dollar bonuses took a dip - but that problem has been solved and Wall Street bonuses are again back at bubble levels, and now you as a taxpayer are further in debt to pay for it.)
But the process of the government buying us time simply put us all deeper into debt.
And now we are in a very, very precarious state. Everything economic is starting to dip again. We've got no Plan B to fall back on. Plan A is to simply spend like crazy. But Plan A has failed, and it will fail again.
Remember Einstein's definition of insanity?

Economic Disaster Awaits!

This is real, folks. Another MAJOR
downturn is barreling down on us.

If you do nothing, you’ll watch your retirement accounts get destroyed … again.
If you do nothing, you’ll watch your investments shrink to next to nothing … again.
If you do nothing, you’ll see your “safe” “rock-solid” investments … “Sure-thing” trading strategies …and decades of your life-savings – get WIPED OUT … again.

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