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Why Spending Now Feels So Right, When It’s So Wrong

By: Curtis Ophoven

3/21/2009 - 16 Comments

A resent comment helped me realize the view of many people with respect to the Obama administration and congress spending spree.

Here is the comment

“with consumer spending down so drastically, it's a great opportunity for the government to increase spending on basic needs (energy research, education, healthcare) to provide us with better lives and jobs.”

I think a lot of people maybe thinking the same thing, without seeing the problem with this line of thinking.

The Culture is Wrong

Spending has become the cultural answer in America for so many years that few seem to think that it could cause any harm.  Why not spend?  Isn’t that what we do in America – at least for the last several decades?  The generation under 20 doesn’t know what it is like to live without a credit card. 

The expansion of credit in the last 30 years has change the culture and removed the very idea of savings money.  The need to saves money is no longer understood or even thought about.  When it comes to money, there is only one thing to do with it – and that is to spend it. This is why I say it's going to take a revolution to bring back the American dream.

Of course the problem with the cultural trend to spend money without understanding its long-term impact is that the day of reckoning is getting closing by the minute.  The money that American’s are spending is not their own and therefore will someday have to be paid back.  Yet, we think we are gaining wealth by spending more money.

Spending Our Childrens Money

And if we don’t have the money to pay it back, then our debtors will take it from our children.  The money that congress is spending today to give us better lives and jobs, will be garnished from the wages of our children – through inflation and taxes.

If we really want a better life for our children, then we cannot spend any of their money.  If fact, we shouldn’t even be spending all of our money, we should be saving some of it for them.

Spending Will Lead to a Depression

If we continue to spend trillions of dollars without regard for the value of our currency on the global market, the world will one day sell the dollar and move to a different currency – as they were discussing last week at the G20 meeting when a new world currency was proposed. 

What that means it that the world is getting ready to take back their money that they have been borrowing us over the last 30 years.  Within a very short period of time the wealth of America could be transferring back to foreign nations - through a currency crisis of the dollar.  Stripping us of our ability to borrow any more money and drastically reducing the value of the money will have.

At this time in history, the Obama spending spree is the single largest risk to the security of our nation - and we don't even know it.  A brief look through history shows that an increase in government spending has never helped the economy long-term and has only been successful at prolonging the problems and created even larger bubbles. 

The current monetary policies of the congress have us on track to create the largest inflationary depression ever experienced in America history. 

 

This week I participated in several blog carnivals

They did an excellent job and as usual, there are tons of great articles. If you have the time, I highly suggest you skim through this week’s carnivals.

Money Hacks Carnival - Hope Edition

195th Carnival of Personal Finance

168th Festival of Frugality

Money Hacks Carnival #55 - Thank You Edition

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The Hyperinflation Survival Guide: Strategies for American Businesses

The Hyperinflation Survival Guide offers strategies for business managers to keep their enterprise afloat in the midst of runaway inflation. Within this succinct little book are a plethora of sensible business strategies for American businesses. If businesses are to survive they must effectively counter and minimize the ill effects of rampant inflation and/or hyperinflation. The utmost prudence is required in managing accounts receivable, inventory, and production at such a time. A sudden inflationary economic downturn may very well bring a business to its knees leading to insolvency.

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

In discussions of today's economic meltdown and what to do about it, the Federal Reserve is a stealth helicopter: it never shows up on the radar. With the exception of a few esoteric specialists and those Ron Paul Revolutionaries who burst into chants of "Abolish the Fed!" Historian Thomas Woods notes in this important book, the Federal Reserve bears a large part of the blame for the mess we're in. In the first part of "Meltdown," Woods shows how both in theory and in practice, Fed policy fueled an artificial boom and is now leading us to a much larger meltdown.

Nemesis: The Last Days of the American Republic

Like ancient Rome, America is saddled with an empire that is fatally undermining its republican government. Johnson surveys the trappings of empire: the brutal war of choice in Iraq and other foreign interventions going back decades; the militarization of space; the hundreds of overseas U.S. military bases. Retribution looms, the author warns, as the American economy, dependent on a bloated military-industrial complex and foreign borrowing, staggers toward bankruptcy.

Day of Reckoning

In Day of Reckoning, Pat Buchanan reveals the true existential crisis of the nation and shows how President Bush's post-9/11 conversion to an ideology of 'democratism' led us to the precipice of strategic disaster abroad and savage division at home. Ideology, writes Buchanan, is a false god that seeks vainly to create a paradise on earth. While free enterprise is good, the worship of a 'free trade' that is destroying the dollar, de-industrializing America, and ending our economic independence, is cult madness.