The World is Insane: pt 4095 - “What is Less Than Zero?”
The World is Insane: pt. 4095 - “What is Less Than Zero?”
Europe is in recession. To deal with this crisis, brought on by massive bureaucratic governments, high taxes, and huge debt loads, the Europeans are moving towards less than zero interest rates.
“What in the real world is less than zero?”
In the real world, nothing. In the world of government driven finance, it means this;
Uncle Sam (or any other government) has no money of its own. ALL of Uncle Sam’s wealth comes from taxes, which you pay. You pay sales taxes, state taxes, property taxes, income taxes, etc., etc., etc… That is the source of Uncle Sam’s wealth. This is also why Uncle Sam can’t give you free stuff. Because Uncle Sam owns nothing. You own it. So, if your Uncle Sam decides he’s going to give free healthcare to illegal aliens, for instance, which even most American citizens don’t get, you might want to ask “Hey, where’s the money coming from, Sammy boy?”
The answer? You, of course. Only now, you’ve got the worlds biggest bureaucracy, as a middle man, and Uncle Sam does not come cheap. That is the case with all of Uncle Sam’s allegedly “FREE” things.
When Uncle Sam runs out of tax money, which he does pretty quickly, (how do you think we have 20 plus trillion dollars of debt?) the government sells bonds, the kind of savings bond you might’ve bought when you were a kid. But, instead of a $5 savings bond, the U.S. sells a trillion dollars in bonds to the Chinese. Or, maybe, $100,000,000 worth of bonds to a couple of trans-national corporations. The way that the U.S. government creates an incentive for individuals and businesses to lend them money is by paying back the money it borrowed, with interest. You lend them ten dollars, they pay you back twelve. Investors lend the government a cool billion, Uncle Sam pays back 1.2 billion. If the government is gonna tie up your money for years, and penalize you with fees, should you try and take it back before the bond matures, you’re going want an incentive to lend them your hard earned money.
“But what happens if a country’s government is broke, and way, way in debt?”
This is where “Less than Zero” comes into play. Instead of the government paying back the money you lent it, with interest, after the bond has matured in 5 years, lets say, the government pays you back less than it borrowed, so it actually costs YOU money. You lend the government a thousand, they pay you back $900. Now, how many people willingly engage in a scheme like that? The Japanese tried it, after decades of stagnant growth, brought on by massive government spending. The Obama administration, towards the end of their term, floated the same “Less Than Zero” scam, as a solution to staggering spending, high taxes, and slow as molasses economic growth, (about 1.6 percent after nearly 8 years and ten trillion in borrowed debt.) They also floated the idea of essentially stealing all your money after you die, among other schemes. This followed Obama’s big tax increases and heavy handed regulation. It was also, as predictable as an eventual rain. This is where much of the world finds itself. Europe is in trouble. America was in trouble, and still will be, should one of these leftwing idiots get power.
This is why Trump matters. And please, don’t give me a few talking points, strung together with MSNBC and CNN headlines, because these idiots are the enemy of freedom. Add an electorate that understands too little, but faithfully believes in economic fairy tales, regardless, and “Less Than Zero” will be our future, as well.
Because, in the real world, there is nothing less than zero.
Europe is in recession. To deal with this crisis, brought on by massive bureaucratic governments, high taxes, and huge debt loads, the Europeans are moving towards less than zero interest rates.
“What in the real world is less than zero?”
In the real world, nothing. In the world of government driven finance, it means this;
Uncle Sam (or any other government) has no money of its own. ALL of Uncle Sam’s wealth comes from taxes, which you pay. You pay sales taxes, state taxes, property taxes, income taxes, etc., etc., etc… That is the source of Uncle Sam’s wealth. This is also why Uncle Sam can’t give you free stuff. Because Uncle Sam owns nothing. You own it. So, if your Uncle Sam decides he’s going to give free healthcare to illegal aliens, for instance, which even most American citizens don’t get, you might want to ask “Hey, where’s the money coming from, Sammy boy?”
The answer? You, of course. Only now, you’ve got the worlds biggest bureaucracy, as a middle man, and Uncle Sam does not come cheap. That is the case with all of Uncle Sam’s allegedly “FREE” things.
When Uncle Sam runs out of tax money, which he does pretty quickly, (how do you think we have 20 plus trillion dollars of debt?) the government sells bonds, the kind of savings bond you might’ve bought when you were a kid. But, instead of a $5 savings bond, the U.S. sells a trillion dollars in bonds to the Chinese. Or, maybe, $100,000,000 worth of bonds to a couple of trans-national corporations. The way that the U.S. government creates an incentive for individuals and businesses to lend them money is by paying back the money it borrowed, with interest. You lend them ten dollars, they pay you back twelve. Investors lend the government a cool billion, Uncle Sam pays back 1.2 billion. If the government is gonna tie up your money for years, and penalize you with fees, should you try and take it back before the bond matures, you’re going want an incentive to lend them your hard earned money.
“But what happens if a country’s government is broke, and way, way in debt?”
This is where “Less than Zero” comes into play. Instead of the government paying back the money you lent it, with interest, after the bond has matured in 5 years, lets say, the government pays you back less than it borrowed, so it actually costs YOU money. You lend the government a thousand, they pay you back $900. Now, how many people willingly engage in a scheme like that? The Japanese tried it, after decades of stagnant growth, brought on by massive government spending. The Obama administration, towards the end of their term, floated the same “Less Than Zero” scam, as a solution to staggering spending, high taxes, and slow as molasses economic growth, (about 1.6 percent after nearly 8 years and ten trillion in borrowed debt.) They also floated the idea of essentially stealing all your money after you die, among other schemes. This followed Obama’s big tax increases and heavy handed regulation. It was also, as predictable as an eventual rain. This is where much of the world finds itself. Europe is in trouble. America was in trouble, and still will be, should one of these leftwing idiots get power.
This is why Trump matters. And please, don’t give me a few talking points, strung together with MSNBC and CNN headlines, because these idiots are the enemy of freedom. Add an electorate that understands too little, but faithfully believes in economic fairy tales, regardless, and “Less Than Zero” will be our future, as well.
Because, in the real world, there is nothing less than zero.