Over the last couple of years Americans have seen the value of their major investment, their homes, plummet.
Now stocks have dropped in value by about one half.
Many years of wealth creation has been for naught. We have a president who thinks the way out of this predicament is to borrow money and use it to save or create government jobs.
The only way to recover from this historic evaporation of wealth is to get the wealth creating machine—capitalism—geared up and running smoothly again.
And the capitalists among us need to learn the lesson that wealth is created by hard work and innovation, not clever investment devices. The socialists among us need to realize that government spending doesn't create wealth, it just creates a dependent class.
It's going to be hard to bounce back from this one. If anyone has a contrary opinion, I'd like to hear it.
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Addendum: This article appeared on Bloomberg.com after I wrote this blog. It says the same thing but looking at the world situation. However, the Bloomberg article fails to take into consideration the collapse in real estate, so the situation is even worse than they posit.
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4 comments:
"Work and acquire, and thou hast chained the wheel of Chance." - Ralph Waldo Emerson
"The only thing that overcomes hard luck is hard work." - Harry Golden
I just memorize these things and wait for them to come to good use. Not really. I was on a random quote website.
What about hyperinflation? As far as the economy is concerned, one way to keep a large amount of money in circulation is through hyperinflation. As far as that sort of thing goes, we're on the right track. The government keeps doing bailouts, and eventually they will need to start printing more money. This will lead to inflation. Naturally, companies that aren't able to support themselves already (Here's looking at you GMC) will need even more gratuitous amounts of money and the government will continue to support them. After a long, drawn out bloodletting, hyperinflation will eventually set in and we'll either be FORCED to spend large amounts of money en masse, or we die because we no longer have money to spend.
This whole 50/50 idea sure gives me HOPE. I just wish the government would CHANGE their strategies.
"Insanity: doing the same thing, over and over again, and expecting a different result." - Albert Einstein.
"Insanity: doing the same thing over and over again and expecting a different result." - Albert Einstein.
I think it would be smarter to just let the failing companies such as GMC go under and file for Bankruptcy, and renegotiate with their labor unions until their debt isn't so extreme. Throwing billions of dollars at a dead cow isn't going to turn it into a hamburger.
Luke and I were joking around, and we decided it would be smartest to give $760 billion to the consumers instead of the companies. That way, the companies with the best products would reap the largest profits, and the bad companies would disappear. Capitalism at it's finest.
Ray - you're a genius. Why don't we put you in charge of everything. While we're at it, the government can give you 760 Billion dollars for your election campaign. The money would be better spent that it is right now.
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