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The Economy on Life Support

Oct 28, 2009

Indulge me for a moment.

The "stimulus" bills are drugs to the economy. Call them "uppers." As long as the government injects the economy, there is a response in the body. But once the stimulus stops, everything goes back to the way it was.

New home sales increased this summer because of the government incentives worth $8000 in tax credits. Once that program ended, home sales returned to the doldrums.


It was the same with auto sales. "Cash for Clunkers" was a success, and when it was over, it was over. Back to the doldrums, only now we're that much farther in debt.

Funny thing about the stock market. It's been down this week because the dollar has been going up. When the dollar goes up, the stock market goes down. We can't win either way, so the government has to choose which poison to take. Don't worry, all nations have the same "poison of choice." They choose to devalue the currency as the lesser of two evils. This poison works a little slower than the other one.

If the Fed raises interest rates to make the cost of money anything above freebee (zero percent), the economy will collapse faster. So they keep it at zero and monetize the debt, buying up toxic mortgages to take them off the hands of their banking buddies. This is the policy of transferring bad debts from the banks to the taxpayers to save the economy.

Yes, I know the Fed is privately owned, but they use the government as an insurer of last resort, so that if anything goes wrong, it is the taxpayers who are liable. If the mortgages should happen to make money, the private bankers make money.

It's the perfect setup: heads I win, tails you lose.

This is the way to fight the economic downturn, and they are doing all that they can. They know what they are doing, because most of the ones causing the problem in the past decade are now the ones running the show. Never waste a bad government. Government is an opportunity to make some serious money.

The bulk of the stimulus money went to the banks that were too greedy to fail. They use the money on investments, which prop up the stock market. Little of it trickled down to the little guys. So the stock market and unemployment rates are both up. I guess that's fair, or so I am told. As long as people are losing jobs at a slower pace than before, we should all be happy, because "this economy is turning around."

No, it isn't. It's more like a runner who is getting tired and slowing down. He's still heading for the cliff, but at a slower pace.

Unemployment rates only count those who are getting unemployment benefits. They get dropped from the statistics as soon as their unemployment checks run out. If they are still jobless, they are called unemployable or discouraged. That's a different category that doesn't normally get published. The government policy is designed to keep the unemployment statistics as low as possible, regardless of the actual number of unemployed.

Many government employees are hired to find new ways to fool the public and keep them thinking that "we're from the government, and we're here to help you." It's a cat and mouse game of reality vs. perception. Corporations do the same thing all the time. If they dump toxic waste and get caught, they hire a Public Relations company to clean up their image so that they can continue to dump toxic waste without suffering the consequences of a bad public image.

It's only when John Q. Public understands the rules of the game that he can do some homework for himself, rather than believing what the government says. Trust in government integrity was the biggest casualty of the Great Depression in the 1930's. No, I don't mean that in the 1930's the people stopped trusting government. I mean that people developed an enormous trust in what President Roosevelt said, and they followed him right off the cliff. That was the era when we changed from an American Republic to a Socialist Democracy.

Alright, we've now had our 70 year captivity to this Socialist Democracy, and the handwriting is now on the wall, announcing its collapse. Many patriotic types want us to return to the previous form of government that was overthrown in the 1930's. Certainly, that would be preferable in many ways to what we have today. But God has a different idea. I believe He intends to do an intervention and give us the Kingdom of God.

Even if this takes longer than expected, I will always be an advocate for the Kingdom of God. I appreciate the Republic that our founders gave us, but even they recognized that it would be hard to maintain it forever. There have always been too many ambitious people who wanted to change government for their own benefit. Too many people continue to think that they are chosen to rule the world and are willing to run over anyone who opposes their ambitions. Being experts in deception, it was perhaps inevitable that they would find a way to overthrow the government our founders gave us.

We are at the point in history where God intends to do something better. In my view, we should adjust our thinking. Instead of advocating a return to the old form of republican government, we should study the Scripture and advocate the Kingdom of God.

Well, that's my story, and I'm sticking with it. Thanks for listening.

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Category: Financial
Blog Author: Dr. Stephen Jones