October 16, 2013

It's the end of the world as we know it... and I feel fine

When you get a serious cut, what do you do? Is the best method of dealing with the injury taking a knife and cutting deeper? Is it better to take a mentally ill person and verbally abuse him? Is the best method to help the homeless walking by, spitting on them and peeing on their blankets? This is what the civilized world has been doing with the economy.

America, Japan and Europe have chosen to continue printing money, increasing their deficits and borrowing to play a game of mutually assured destruction in a competition to inflate their currencies into oblivion. They think, we'll increase our exports, we'll monetize the debt, we'll keep the economy from suffering, we'll keep elected office!

A more accurate way to see the Keynesian terrorism is selfish cowardice. What about the next generation? What about being financially responsible? When we are young, we are told to save and invest our money. We aren't told to buy as much candy as possible and play all day. Instead, we are told that if we work hard, we will see success. You can be anything you want to be as long as you stay out of trouble and do the right thing.

The stewards of most of the world's wealth, America, Japan, and Europe are choosing continued bail-outs not only of zombie companies, but of individuals by giving them money for nothing. They are attempting to buoy the economy by stealing from the future.
The next politicians can worry about the debt, my Grandkids will come up with a way to pay, we can simply move to a new planet after we've destroyed this one.

Wouldn't it make more sense to be grown up and choose to admit that we screwed up? We have a money problem. We borrowed and spent, and now that we're supposed to pay back our debts, we simply don't have it. Fine, no problem, we'll work something out. In business, this is called bankruptcy. You tell the creditors that you don't have the money, and work out a plan to pay them back later.

Default, what is it? It means you miss a payment to someone you owe. We can't pretend that there's only one entity that won't get paid. We are not simply not paying China, ensuring that Grandma dies immediately if she doesn't get a welfare check, or missing the cure to cancer because a scientist didn't get to carry out his experiment. China is patient, Grandma will realize that her household budget has gotten smaller, and cancer hasn't been solved for thousands of years. Another couple of days won't change anything.

There are penalties for being irresponsible with money. It is time to face those consequences. It's not the end of the world. Time will not stop. Night will come, and then morning after that.

It is time to be adult and admit that we screwed up. Let's default and start to clean up the mess we made.

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