Tuesday, March 24, 2009

Out of Money? Loan Yourself Some.

You may have recently heard the term, "monetize the debt". Basically we are buying money from ourselves and giving ourselves an I-Owe-You. You may be thinking that this is some kind of joke. It's not. This week the Federal Reserve is buying a bunch of long-term treasury bills. This always creates inflation, raising the cost of milk and making the dollar worth less.

In the real world, my house, if we run out of money we have three options:
  1. Borrow some money from someone else.
  2. Spend less.
  3. Work more to earn more.
The option we do not have is borrow money from ourselves. This is what our government is doing now. In the real world, why can't I borrow money from myself if I have no money? Humm, I don't know, maybe because I have no money.

The only way to get "money" from myself when I have no money is to make my own. There is a little word for this, counterfeit. That story would end with me in the slammer.

So what are we to do? Let's look at the options as outlined above:
  1. Borrow from someone else. The creditworthiness of our country is sagging. China wants to move away from the dollar and the world in general is very nervous about our situation. Not the best option.
  2. Spend Less. We are doing this in our households but not as a nation. Our government is actually spending more. Ya, that makes sense.
  3. Work More. Since the government does not produce anything this is not an option. The closest the government can do is tax our work making us work more. Unfortunately this seems to be a real option.
It can be depressing looking at all this stuff. Fortunately we are a strong country made up of strong families with strong values. It's time to get back to basics. Live on less than you make and thank God for the great blessings he gives us everyday. Remember, God is bigger than any problem we will face as a nation or as individuals.

1 comment:

  1. I always struggled with that concept to. We, as a nation, are struggling to pay for things. China is scared we're going bankrupt and seeing as how we have borrowed from them their fear is justified.

    So what do we do?

    Spend more?! Wat?!

    Nice, Obama. Clearly your years of experience are leading us to "Change".

    ReplyDelete

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