Our financial meltdown is a century climax

The one who loves pleasure will be a poor person;
whoever loves wine and anointing oil will not be rich. — Proverbs 21.17

This is not just about private behavior. People do make themselves poor but, often enough, they learn in time from failures or from others that they need to save.

But what if we constructed a nation that diverted all proposed savings into consumption? What happens when the government claims that their bonds are a form of savings?

So we “save” by loaning the government money. We have security knowing that it will come back with interest.

But why is interest possible? Because people find productive uses with the money.They do profitable things with it so they can pay back the creditors/savers.

Does the government do that? Has the government been using all its debt for investment? Are we doing just fine with all the government’s infrastructure responsibilities?

Or has the government really borrowed money for the purpose of immediate consumption? Is there anything behind the promise of repayment with interest other than simply the ability to tax people at a later date?

Think of all the changes that happened in the nineteenth century: buildings, bridges, factories, roads…

Where did all that investment come from? Someone had to save money and then loan it for needed projects that were believed to be a way to satisfy future wants.

Now, in the twentieth century, the government developed 1.) new ways to directly confiscate people’s wealth and 2) new ways of diverting people’s savings into immediate consumption rather than investment.

All those trillions of dollars that could have been invested in the formation of capital for future use got sent to overthrow Noriega prop up corn prices and get people to walk on the moon.

And, just to add delusions to damage, we developed financial tricks to pretend we were not impoverishing ourselves.

Now the time is up and everyone wonders what is happening.

What happened is that the we’ve consumed for a century rather than produce.

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