I’ve noticed that foreign countries continue to follow in the footsteps of the United States government’s reckless economic policies. To start, Japan’s central bank recently cut its key interest rate to be between zero and 0.1 percent. I don’t even feel the need to expand on that because everybody can hear that bubble forming in the distance. We can look at Ireland’s present state in order to see what Japan will look like in a year.
Ireland is in the middle of a financial crisis where there are communities dotted with half-built developments sitting on top of bad loans — sound familiar?
According to Sky News, a UK-based satellite television news broadcaster and sister company of Fox News, the bailout of Anglo Irish Bank may cost up to ?29 billion, roughly equivalent to all of the taxes collected in Ireland per year. Finance Minister Brian Lenihan states that the ratio of the government’s debt to the size of Ireland’s economy will be 98.6 percent at the end of 2010.
In the United States, Treasury Secretary Timothy Geithner recently stated that Troubled Asset Relief Program will actually only end up costing a little less than $50 billion, and, while the amount of money has much less to do with my objection to it than does principle in general, this is approximately the size of the Anglo Irish bailout package. However, Ireland’s population is equal to nearly 1 percent of the U.S. population.
It’s a disgrace for the government to do such a thing to future generations who will no doubt still be paying the debt back while they float around on hover cars.
Why is this happening over and over again? You don’t need to predict stock trends in order to make money anymore. All you need to know is that the United States government will make a mistake, and then a foreign government will make the same one. The trend is that taxpayers keep getting slapped in the face. You just need to guess the country.
Not that we’re any better. We don’t even pay attention to the history of our own foundation. What happened to no state making anything but gold and silver coin a legal tender in payment of debts? Without fiat money, this problem would have never happened.
Our Founding Fathers witnessed the inflation of paper Continental currency during the American Revolutionary War. Even Johann Wolfgang von Goethe warned of its implications when he wrote Faust following an experience with hyperinflation of the real estate-backed paper money during the French Revolution.
When will we stop acting as if the mistakes that governments have made throughout history don’t apply to us? We may feel like nothing is wrong while the Federal Reserve inflates the money supply, but we’re heading for a deadly cliff that gets taller each time we pretend like ignoring the problem will make it go away.
As our country continues to take this drive down Denial Road, where the economy doesn’t seem nearly as bad as it really is, we need to remember that objects in the rearview mirror are closer than they appear.
Inflate Brian’s inbox at brian.p.anderson@asu.edu
