Have our governments signed a death warrant for our economies?
(FEDERALJACK) National debt is soaring, the private sector is contracting, the public sector is growing and the government is continually wasting money that you haven’t even earned yet. You have heard the countless stories about how the private sector created the economic crash and that government intervention is the answer but I can assure you that this is a lie. It was government intervention that caused malinvestment by the private sector, it was government intervention that caused the crisis and it is government intervention that is prolonging and deepening the crisis.
This entire economic crisis is not something that was created in a few years; it has been brewing for decades. There is a natural trend in a economy that when times are good people will become careless investors because they don’t think anything can go wrong. This breeds bad investment which in turn causes a downturn. This is a natural cycle but the governments of most western countries have, over the past few decades, not been allowing the crash to happen. We just saw it now, instead of allowing the bad businesses to fail they prop them up with borrowed money, they artificially lower interest rates and they command everyone to keep spending. This call to keep spending has been largely obeyed by the public, like good citizens they went out got a loan and bought a car or a house or something else they didn’t need and couldn’t afford.
Once these businesses have been propped up they no longer control their own policies so they can’t respond properly to the market. As a downturn happens banks should naturally put interest rates up and this encourages people to save. This money that is being saved is then invested by the bank into future industry (not current industry since there isn’t a market for it). This means that as the recession lifts the infrastructure is already there for a quick recovery. Instead of this happening the government has set spending targets for the banks that they bailed out which means that they can’t make sound future investment they have to make flawed investment in failing businesses.
As this happens we see the re-inflation of the credit bubble that just popped. With the government and banks discouraging people o save the banks don’t get the capital to back up their loans. This is why we will see a bigger crisis in the near future in which all of the bad investments made now will fail and banks will once again go into crisis and the government will once again bail them out. So you may be thinking that there is no problem, so long as we repeat this cycle we will avoid the major recession but this is a false understanding because the only reason the government is able to re-inflate the credit bubble is because they have taken out massive loans from overseas investors. As long as these foreign investors still think that it is wise to invest money then there won’t be a problem but sooner or later they will realise that Britain and America can’t repay the loans they have taken and then they will demand their loans returned at which point the government will go bankrupt. The IMF will be called in and everything will go into meltdown. Taxes will be huge, banks will go bust as the government subsidies dry up, businesses will go under due to the lack of access to loans and the economy will collapse leaving the biggest recession n history in its wake.
Remember that every penny that the government loans is deepening our crisis evermore and every pound squandered on public services is furthering the problem of there being too large a public sector for the private sector to support. The British national debt has now reached 2/3rds of GDP. £800 billion of debt, and that figure is expected to go up by £173 billion this year due to the massive budget deficit. Every person in Britain is born with over £10,000 of debt to work off for the government on top of their normal taxes to run the government and their own living expenses. So brace yourself for another recession. Save, don’t spend, pay off rather than take out debt. No matter what you are told by the government and mainstream media you must save so that you have something that you can survive on through the next recession.