How the government steals $900+ from you, and makes you feel good about it!

I have heard many positive comments about the $900+ stimulus check, generously stolen given by the Australian government to most Australians.  I’m not here to argue about all the wonderful things you’re going to do with the money – I know what I’ll be doing with it – but I want to remove any warm fuzzy feelings you have about this whole plan and dispel any propaganda misconceptions you may have.

1)  The government DOES NOT have any money to give you… the government only has money that it TAKES from you and REDISTRIBUTES, largely for political purposes.

What the government doesn’t tax, it borrows (which must be paid for by increased taxes).  When the government doesn’t tax or borrow, it prints… which causes inflation – otherwise known as the the unofficial sales tax for existence.  So let’s apply this point… the $900 you are receiving in the mail doesn’t come from money saved by the government (as it has already spent all of it’s budget surplus).  It is giving you borrowed money that it has to pay back… and when I say the government has to pay it back, I mean YOU have to pay it back through HIGHER TAXES.  Which means you’ll end up paying way more than $900 over the next couple of years, which is essentially an ADVANCE.

Let’s put it this way.  How would you feel if I took $900 from your wallet,  and you didn’t know it was me.  And then I generously lend you $900, with interest of course, in your time of trouble?

2)  The government is giving money to you to delay the Australian economy from IMPLODING…

Our GDP (gross domestic product, size of our economy) is approximately 70% dominated by the service sector… or in other words, CONSUMPTION (e.g. buying plasma TVs, iPods, clothes, cars and homes).  A large portion of this consumption is financed by DEBT… debt can only be serviced by wages from EMPLOYMENT.  What has happened over the last 10+ years is that debt has expanded from massive HOUSING BUBBLE in Australia… or in other words, people have used their houses like a giant ATM card.  Provided the prices of houses increasing, the amount of debt we could use to CONSUME increased.

But the bubble is now bursting… people can’t afford their houses, servicing debt is unsustainable, house prices are falling and UNEMPLOYMENT is skyrocketing.  What does this mean: no employment = no money = can’t pay debt = can’t buy stuff = contraction of GDP = more unemployment (lay off retail sector jobs) = no money = can’t afford mortgages or credit cards = etc… the circle of ‘death by debt’ continues.

So by giving everyone an ‘advance’ of $900, the government is telling people ‘PLEASE GO OUT AND SPEND!!!’ to stop our economy from crashing… but any reasonable person will see that this plan will only cause more problems than it temporarily solves.  Not only will people have to struggle to pay debt, now they have to pay higher taxes.

I’d like to say my 5 point plan to what should be done, but I know it will never be adopted… so I won’t waste my time.  Let me make a personal appeal to you instead: don’t waste the money.  Either pay off debt or invest the money into something that will make you money (yes there are still places that are legitimately making money – NOT HOUSING).

So do you research, don’t perish because of lack of knowledge.  Most importantly, trust God… He is your provider, not the government.

God bless,

Washo

Suggested reading:

www.debtdeflation.com/blogs

www.mises.org