Saturday, September 20, 2008

$700,000,000,000

$700 billion dollars. That's how much our government is going to spend on bailing out a bunch of companies run by incompetents and who were in large pert put in this position because of the regulations currently on the books. What the financial sector of the market needs is deregulation, not more regulations. They need to have failure privatized. Meaning, companies need to know that they will be allowed to fail. And the government needs to let them fail. The situation we're in now, the government has only postponed the inevitable. And, worse, like a fault line prone to earthquakes, the longer we put things off, the worse the quake is going to be.

The federal government doesn't have almost a trillion dollars to spend. It does not have $700,000,000,000. So where will it get the money? It will borrow it. That's another $700 billion added to the debt. How will it pay off this debt, which will come due some day?

1) taxes -- which will take more money out of the economy and create a worse economy overall
2) print money -- which will result in massive inflation
3) default -- considering how much of our debt countries like China own, this is the last thing we want to do. Can you imagine defaulting on a trillion dollars to China? We would be at war with China -- and they would be in the right.

Some wonderful choices given to us from the ghosts of socialism past. The interventionist state does not work. Socialism doesn't work. Centralized financial planning works no better than overall economic planning does. I hope -- but doubt -- someone will get the message and get the government out of the economy. I expect instead that we will get even more regulations out of this. When the collapse does finally happen, it will be the Great Depression II -- only in an even more globalized economy. But don't worry -- Obama plans to hurry things along by raising taxes and imposing tariffs. That worked so well during The Great Depression. It didn't make things worse or lead to WWII at all. Please ignore history. Nothing to see here.
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