Financial news reports constantly say that this stock is about to go soaring, this asset will go plummeting, and if you do end up hearing the economical state of the country, then you usually hear an upbeat tone. But the rising unemployment (part-time jobs don’t count), as well as falling wages, don’t seem to you to be the earmarks of a healthy economy. Besides, who trusts the talking-heads on TVs anymore?
So you decide to dig a little deeper. Once you go online and look up financial websites, you constantly see polar opposites. One site is heralding the coming of great prosperity that will result in a soaring stock market, while others are telling you to get out of it because a colossal financial crisis will wreak havoc on America.
What are you supposed to believe? I’ll tell you which one, as well as try to convince you why I think my choice is correct.
So what is my opinion? The economy of not just the US, but the entire world, is being suspended on strings. Everyone and everything can either be saved or completely ruined with one fatal stroke. I don’t think that anyone is going to come in time who actually believes in sound, time-tested monetary principles.
Let’s start off with the first major issue: the government. The entire problem of the world can almost be summed up by that one word. Practically everyone (except the few notable ones that should be celebrated) in any government is there to get powerful and rich. That’s all that they’re really after.
So what are there mistakes? Well, there are several: the fact that the bureaucrats are printing money non-stop, the bloated and disgusting agencies they’ve created, the senseless war they’ve started, and there constant meddling in the market.
Let’s start off with the first one. The government printing money. Let me clarify just a little bit. It’s not the government or the cover-your-rear bureaucrats that are printing the money. The real culprit behind this are two entities: the Federal Reserve and the Treasury Department.
Both of them work in tandem to print money. This money is used for multiple things. It’s used to fund the government wars and agencies. It’s used to protect the well-connected banks of the US. It helps facilitate government control over their people, because now they can afford anything. Finally, it creates bubbles in the market, which the well-informed friends and members of the government then use to their advantage to grow filthy rich.
The first one refers to the millions and billions of dollars that’d been spent on the troops in the Middle East. As many notable historians and economists have said, “war is the health of the state.” War helps nationalize the people and invoke there inner-patriot, allowing the government more leeway to do as it pleases. It allows them to spend money (something the government loves to do), as well as point to the people and say “ha! You said we weren’t doing anything!”
During a war, massive amounts of resources, such as fuel, metal, cloth, rubber, and men are consumed, when they could’ve been used to strengthen the infrastructure of America during the time it needs it most. Countless lives are lost, men and women are scarred for life (physically and mentally), all in towns and countries most people can’t find, and for vague reasons that don’t stand up to a decent set of criteria.
Although they do make for interesting reads, the enormous organizations such as the CIA, NSA, and DEA have multi-billion dollar budgets, and what good have they done? Drug abuse is still rampant in the US, our online privacy has been completely demolished under the dual-assault by the CIA and the NSA, and we’ve fostered un-imaginable feelings of retribution abroad.
All in all, billions of tax-paying and printed dollars are being spent on these mutant organizations, and what good have they caused? Almost none.
The ginormous financial institutions we call “banks” are actually working in partnership with the government. Well-known businesses, such as Bank of America, Chase, Capitol One, and Goldman Sachs are all banks that are part of the Federal Reserve. These banks are backed up by the government, so that they can now lend almost at abandon, and know that they can just call on the Federal Reserve Board if either a) there’s a bank-run that they just can’t satisfy, or b) there assets and investments turn sour.
Now that I’ve explained the logic behind the other two statements, this one should be pretty obvious, but I’ll still explain it. The government can control the people because it can now buy out anyone. It can debase the currency and leave the people penniless. The government can buy up incredible amounts of weapons, ammunition, and armor, and then make the people fight against an army. Those are all prospects that aren’t very fun to think about.
The way the government creates bubbles in certain parts of the market is by meddling with the interest rates. If they artificially lower the interest rates on housing loans, then more people will buy houses. Lower interest rates on auto loans will result in more people buying cars. People that are in the know can ride these bubbles all the way to the top and then get off of them before it pops. Then they get on a new one and surf it all the way up to the top.
Then there is the inflation factor. Although most people don’t pay attention to it because the reported numbers make it seem small, inflation is a very dangerous thing. Just look at what happened in Germany, Zimbabwe, Austria, Russia, Ukraine, Brazil, Hungary, Argentina, etc. The inflation rate spun out of control, ending up in enormous cases of price increases (in the case of Zimbabwe, over 〖10〗^20 percent annually).
“But our government won’t do that!” you say, “They’ll be smart about it!” Well, did all of the government “smarts” cure the Great Depression? That’s exactly what I thought. If you take a look at history, only deregulation was the only reason why the economy sprung back to life.
The final thing I wanted to discuss is very closely tied to the previous mention about the government not curing the Great Depression. A lot of the depressions before the Great Depression were short lived. In fact, the one that was supposed to be even worse than the Great Depression, the one that happened right after the “War to End All Wars,” lasted only a year, and resulted in the Roaring 20’s (which was another government bubble in the stock market).
So how was that depression that hit right after WWI so short-lived, and resulted in so much prosperity? Simple, the government cut spending! As miraculous as that sounds, government spending is not the cure to a depression (Herbert Hoover was not stingy. In fact, until FDR took over, Hoover was the most spend-thrifty president in history). What is, is a cut to the government budget and de-regulating the free market.
If business men are allowed to go broke, freeing up men, money, and machines that can go elsewhere for more productive uses, or are allowed to get rich, in which they hire more men, leading to smaller unemployment figures, at discretion, then the economy will prosper.
Sadly, that’s not what happened during the Great Depression. Even more sad, is that that’s not what’s happening right now. Instead, what’s being debated in Washington is simple: how can we get more power?
Lesson 150/155 Assignment: Write 600 words on your present view on the economy
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