Wednesday, November 24, 2010

Quantitative Easing - Smoke and Mirrors

How Are We Going to Get Out of this Mess?

President Obama announced in August that the recession was over.  That's good news, right, for the US and for Canada?  I guess it might be if it were true, although technically it is.  But, there might be a little more to it than that.

You may recall that there is a plan to put a new $600,000,000,000 into the economy ($600 billion).  If we had that amount of money, it might be a good thing.  But, this dough is going to be created out of thin air.

Since the first push of money into the weak components of the economy, think auto manufacturers, and banks a couple of years back, there has been a ballooning of government debt in North America.  But, this is a good thing right?

Maybe not so.  If you have recently lost your job, should you go out and buy a new house, tv and car?  You would be out of your mind to do that, wouldn't you?  That would be spending money you don't have, and in tough economic times (well really any times) that is not a particularly good idea.  So, if we would not do it personally, why sould our governments do it?

So, in the midst of this, I received a humorous, though possibly sadly true, commentary on economic stimulus, and the payments made to Americans by the government a while back.

Sometime this year, we taxpayers will again receive another 'Economic Stimulus' payment.  This is indeed a very exciting program, and I'll explain it by using a Q & A format:

Q. What is an 'Economic Stimulus' payment ?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money ?
A. From taxpayers.

Q. So the government is giving me back my own money ?
A. Only a smidgen of it.

Q. What is the purpose of this payment ?
A. The plan is for you to use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China ?
A. Shut up.

Below is some helpful advice on how to best help the U.S. economy by spending your stimulus check wisely:
* If you spend the stimulus money at Wal-Mart, the money will go to China or Sri Lanka ..
* If you spend it on gasoline, your money will go to the Arabs.
* If you purchase a computer, it will go to India , Taiwan or China ..
* If you purchase fruit and vegetables, it will go to Mexico , Honduras and Guatemala ...
* If you buy an efficient car, it will go to Japan or Korea ..
* If you purchase useless stuff, it will go to Taiwan ..
* If you pay your credit cards off, or buy stock, it will go to management bonuses and they will hide it offshore.

Instead, keep the money in America by:
1) Spending it at yard sales, or
2) Going to ball games, or
3) Spending it on prostitutes, or
4) Beer or
5) Tattoos.
(These are the only American businesses still operating in the U.S. )

Go to a ball game with a tattooed prostitute that you met at a yard sale and drink beer all day !

No need to thank me, I'm just glad I could be of help.

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