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April 15, 2012

Video: So, Roger ... Where's the Money Coming From?

Topics: Political News and commentaries

Making poor lending, spending, and borrowing decisions is by no means uniquely American ... the Europeans are going through a debt crisis of their own and it's having an impact on America's economy. What's been going on is that several broke countries have lent massive amounts to other broke countries and nobody can pay each other back. Bailouts are inevitable, but where is the money going to come from? Some other broke economy! And round and round it goes. Comedy team Clarke and Dawes put this in perspective via a mock business game show. At first it comes across as hilarious, but then when you realize that this video was made back in 2010 ... and the situation has only gotten much much worse ... you realize that it's not all that funny at all. It's downright scary.

Having created entitlement societies, governments keep spending and borrowing ... and loaning ... from and to each other until there's no longer any money to spend, loan, or borrow.

As for simply 'printing' more money (now called quantitative easing), that makes the situation all the more worse ... it devalues the currency and drives prices up so more money is needed to pay for less goods and services (governments need to then borrow even more money from governments that don't have it because the governments they'd previously loaned money to have no money to pay them back with).

Printing more money will simply spread the value of the existing goods and services around a larger number of dollars -- which is inflation. Ultimately, doubling the number of dollars doubles prices. If everyone has twice as much money but everything costs twice as much as before, people and their governments increasingly pay more for the same goods and services and the money eventually becomes essentially worthless. And between spending, borrowing, loaning, and giving (and the U.S. does all four) ... America and Europe are in a one-way downward cycle on a path that has one and only one possible outcome - out of money and no one to borrow it from. It's not rocket science - even a liberal-progressive could see it if not blinded by ideology.

Posted by Hyscience at April 15, 2012 11:43 AM

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