A money-back guarantee

If you don’t like the economy, Washington is going to give you your money back. $800 worth.

Well, actually it isn’t YOUR money. Your money is being used to pay interest on a $9 TRILLION national debt. Those $800 checks will simply be added to the debt. It’ll be worth it and it’ll only cost $150 billion to do it. $150 billion looks like peanuts added to the $9 trillion.

And what a shot in the arm it will be for us. We can take that $800 and buy a blue ray at Best Buy. Or maybe put a down payment on a new Toyota so they can out-sell GM this year.

If you’re wise, you’ll use it to pay down the old VISA card. But that isn’t very glamorous is it? And it doesn’t exactly fit the model economists are hoping for. You have to buy something and put that money into circulation.

It’s all about perception. “Happy days are here again!” Retail sales are up!

It is hard to believe but there was a time in this country when the value of company stock was based on things like sales, inventory, equipment, orders, new products….. Now we trade stock based on what we think others will think the stock is worth. The company itself? Not so important. Everything is temporary anyway. They outsource the product, use temps in the warehouse and the office, contract with independent reps for a sales force, lease the furniture and fixtures, and have the computer support done in India. Not much value there, huh?

But we are buying the bread and circuses. Personal savings accounts are a thing of the past.

May I suggest that an economy manipulated by government (as it has been for decades now) is very fragile indeed and can only be maintained with frequent (and more intrusive) stimuli such as the one being offered now. It masks the true value of goods, services, and loans. It makes us dependent on foreign capital.

And worst of all, it is not self-sustaining.

Did I mention that in China the personal savings rate is 30%? In the United States it is…well, we don’t have one because it has gone negative. And it has been close to zero for several years. Don’t you think that if “spending our way out of a recession” actually worked, we wouldn’t be where we are today?

You really have to worry when the Republicans and Democrats agree on an idea. Fret away, folks.