Thoughts on the Economy

Notes:

-Jobs are still being lost – just at a slower rate
-Jobless recovery?  Who are they kidding?
-Double dip recession?  The 3.5% increase we saw was due to cash for clunkers and the real estate tax break.  There really hasn’t been a break in the recession.  This was an artificial bump in a chart – something made because of the government’s stimulus package.
-Fiat money system.  You can’t keep printing money and putting it into circulation without debasing the dollar eventually.  Hyperinflation could become a real possibility.  Look at Germany before WWII.
-History shows that every time a government has tried to print it’s way out of debt that it debases the currency of the time causing an economic disaster.  Ancient Rome did the same thing, although it took hundreds of years before it finally fell.
-The banks on wall street are taking stimulus money that they should be lending to U.S. consumers and are investing it instead.  With a 0% interest rate that’s quite a deal for them and very hard to resist for companies that are only in it for the bottom line.  The more money they can make the happier they are.    To hell with the rest of the country.
-The U.S. has built up massive debt over the last 30 years with the advent of credit cards.  It’s not that credit cards are a bad thing, it’s just that most people who use credit cards do so irresponsibly.  If you don’t have the cash to pay off your debt at the end of the month then you shouldn’t spend, but people do and that’s part of the problem with the economy today.  U.S. citizens consumed like crazy, buying everything from cell phones to new cars on the credit cards running themselves into mountains of debt.
-Now that we’re actually seeing the evil of our ways and trying to spend less, the country is in big trouble.  Spending creates need.  When consumers are buying stuff inventory levels drop and businesses must manufacture things in order to keep up with this demand.  Well, we spent and spent and spent, and now that the bubble has burst and people are looking around and saying, “Well, I wish I hadn’t bought all this stuff now,” so they stop buying.  This creates a vacuum where there used to be a demand for goods and services, and with this drop in demand people are getting laid off from their jobs, and the cycle goes around and around.  The more people that get laid off the more people are being thrifty with their money.  The banks are supposed to be loaning the trillions of dollars to the consumers so that they can go back to consumers, but with the higher standard the banks are demanding for credit card holders it’s harder for users to get approved for credit.  With this lack of cash being spent there is no demand and thus more jobs lost.  Until this trend is broken there will be no recovery.  There can be no recovery.
-If the government keeps giving money away they might as well put money straight into the bank accounts of all it’s citizens instead of trying to run it through the banks.  People would take the money – whatever it may be, let’s say $10,000 – and spend it on something extravagant that would help boost the economy. 

This will never happen of course, at least I hope not.  But it does show the idiocy of what the government is currently doing to the economy.