The markets enjoy their biggest one-day rally in history! Panic selling is replaced by panic buying! And what's the source of this sudden enthusiasm? A hastily slapped-together mega-plan, concocted over the weekend by the G-20 leaders, to drastically increase the role of government in every part of the world financial system. I'm still trying to sift through the details, but it seems like - at least in the short term - the government is going to "invest" $250 billion in tax money (*your* tax money - hey, where do you think it comes from?) into the financial system. And you can be sure this money will come with strings attached. No doubt the government will become intimately involved in everyday banking and business transactions to bring "stability" and "confidence" to the system. And yet everybody seems to love it. Why not? The government has just promised banks and businesses that it will magically prevent any of them from ever losing money on bad loans again. What a sweet deal! The whole concept of "risk" is so passe. Now the banks can just toss out that $250 billion in new loans to get the economy moving again. Oh, and I'm sure there won't be any political influence on who gets those loans. No, that would never happen. I think, in thirty years or so, our kids will look back at the past two weeks (provided they still teach history in 2038) and describe it as a Takeover, or even a Coup, of the world's free markets.
Oh, well, free enterprise was nice while it lasted. Embrace the future, Comrades. And by the way, with this recent spending orgy, the national debt has just added an extra digit, racing past $10 trillion with its foot on the accelerator. And that's not counting the impending nightmare of entitlement promises - those Boomers are just starting to cash their Social Security checks. As I said before, it's all well and good to raise a pint as we gather for Capitalism's wake - but I hope to also come up with strategies for the future. One thing I plan to do is research various western European economic systems, especially Britain, France, and Germany. They're further along the decaying spiral of cradle-to-grave Welfare Statism, and I think they'll give us clues as to what to expect in America in ten to fifteen years. Here's an easy call: no matter what Obama - or for that matter, McCain - is saying in their campaign ads, your taxes are going UP next year. That's simple math. The government needs a LOT more money now. A LOT more.
1 comment:
I would point out to those who say they are selling T-Bills and not taxing are incorrect. T-Bills are future taxes. Just like minimum payments on credit cards are claims against future income (plus interest).
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