Friday, August 25, 2006

The Easy Money Mentality

There is a certain economic trend in America that is quite disturbing. This trend is the overuse of borrowing and credit by the people, which leads them into a long road of debt and bankrupcy. In effect, people are living beyond their means. This trend is also equally reflected in by the government itself - as the goverment also functions off of the "easy money" method of borrowing and inflating beyond its means. The federal reserve temporarility "sustains" the government's debt and inflates the money supply considerably.

The result is the perpetual erosion of prosperity and economic incentive for everyone, especially the middle and lower classes. This sets a bad example that rubs off on the general populace, and it climaxes as a horde of special interests that are all fighting over government money, as if it's "free", when it is at the expense of others and themselves in reality.

Any new positive government program, department or initative that people propose inherently is going to be at the expense of such a system, where the people's tax dollars are drained, the inflation required to the produce the funding is an extra tax on the middle class and below, and the borrowing required to sustain such a big government continues to endebt the government and has the already over-taxed and endebted people pay the bills. The purchasing power of the dollar, especially for the middle and lower classes, continually declines.

Neither a government, family or individual in society can sustain such a practise forever. It has to burst at some point. It cannot be sustained indefinitely. And thus comes the "bust" periods in our economy, the depressions and inflationary depressions. The day of reckoning, like the famous stock market crash of the Great Depression. People would be much more economically secure if they tried their best to pay for things in cash, and the government would be allowing everyone's standard of living to improve if it ended it's perpetual cycle of taxing, borrowing, printing and spending.

But the more that the government is perpetually pumped up into a mammoth, the more the economic problems get worse. The only way to make the individuals and families in society more fiscally responsible is through example. The government's example is that of one that borrows and spends like a drunken sailor, and many people who are too niave about the government and/or special interests get caught up in that mentality, in which they are all battling for more money that comes from a system that has already taken a decent chunk of their money, devalued their currency significantly, and redistributed their money to special interests, corporations, and various classes of knaves.

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