Thursday, February 19, 2009

Spending money that you don’t have

Think for a moment that you are in debt and your costs are higher than your income and that your costs are getting higher all the time, with your income standing still or at least not getting higher at the same rate as your costs. You are about to go bankrupt and this will also highly effect your children and grandchildren whom will inherited the debt you are responsible for. What would you do?

Well if you are a politician, you would borrow more money, letting todays and future taxpayers pick up the tab. And then you would go out and spend it all and increase the debt even further, and then you need to borrow even more money so you can keep spending. Isn’t politics fun?

This is what’s going on in the world. The new American president is going on a spending spree; the British and German governments are doing the same. And this they do during a time when the economies are built on a very shaky foundation that could collapse at any moment. But it gets even funnier. Alistair Darling, the British Chancellor, have gone to the printing presses to: ”make more money”. This is the same thing as to say to the market: “We give up” and it means that they no longer intent to pay the bills, which will lead to even less investments and consequently even higher debt with more people losing jobs and even higher loans. Are you getting this?

But it does not stop there either. Unions, socialists and even companies are crying and asking for governments to help and bail them out. People are gathering at demonstrations to force governments to spend even more. And just around the corner there it is; the biggest crisis in recorded history. The last time we got real exciting guys like Mussolini and Hitler, I wonder who we get this time?

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