Stimulus packages.

The government sees our economy is trash and the way they propose to fix it is to make a bunch of stimulus and bailout packages in the billions of dollars. What is the effect?

My Take:

 First off lets look at the normal American.

A check shows up in the mail for $500 from the government. They say this is to stimulate the economy and they want you to go and spend it. You then take a look at the current economic crisis and say, "I'm going to save this because the economy is in shambles."

The statistics I believe were that over 80% of people saved the stimulus check instead of spending it because of fear that the economy is only going to get worse. What effect does this have?

Lets first take a look at where this money came from.

Did president Obama go to the bank and withdraw billions of dollars from a bank account? No.

Did the big banks and rich people of the world donate the money to be given to us? No.

So where the hell did the money come from? The Federal Reserve.

If you don't know who or what the federal reserve is; one why don't you know about your country; and two get with the program and do some research!

However, I will give a brief description. The Federal Reserve Bank is a group of CIVILIAN bankers who are in charge of and control our money. Look at the top of a dollar bill, it says, "Federal Reserve Note." I bolded and underlined the civilian part because that is important.

So wait, our entire monetary system, our whole money supply is controlled by civilians? Not government employees? Correct. Why is this important? It means that they aren't under government control and therefore do not have to follow the same rules and cannot be manipulated by our government.

Back to where the money comes from. So when this stimulus bill got approved, our government went to the federal reserve and APPLIED FOR A LOAN. That's right, our nation which is a world super power is asking civilian bankers for a loan. This is an entirely different discussion that I may write about at a later date.

So we take out this $814 billion loan. We then divide it up and send it out to the American people. Well like any loan there is interest to be paid. We just gave out all that money to the people, how do we pay the interest on the loan that was just taken out when we are already trillions of dollars in debt? We take out ANOTHER LOAN. Yes. We just pile on the debt. We do the same thing when we need to fight a war. We need billions of dollars to fund weapons, vehicles etc so we ask the federal reserve for money. We spend that money on the war and then take out another loan to pay the interest on the original loan.

Does it make more sense now as to why we are so far into debt?

Next issue. Where does the Federal Reserve get all this money to loan out? Do they just have an account with trillions of dollars siting in it? Ya right. The Federal Reserve UNDER LAW that WE signed and approved is allowed to create or print money. Yes. They can just start up the machines and print away.

So when we go to the Federal Reserve asking for a loan they say, "Sure! Let us create some money first, we will then loan it to you, then you can pay us interest for money we never even had!" Pretty good deal for them huh?

Lastly, and the most important thing to understand. Creating money like this creates inflation. Well Kris, wtf is inflation?

Let me explain. Say you and 3 other friends each have $10. Then say this $40 is the only $40 in existence. You are a farmer. Your other 3 friends are a doctor, landlord, and supermarket owner. The supermarket needs food to sell so he pays you $2 for your food. You have 12$. You have to pay your rent, so you pay the landlord $2. He now has 12$. The landlord needs medical attention and pays the doctor $2. He now has $12 and so on. This is the cycle of a stable economy. Notice however that there is never any more or any less than $40 in existence so you can say that $1 is always worth or VALUED at $1.

Now lets say we pass a law allowing the doctor to create money. He needs to pay his rent but is currently broke so he creates $2. There is now $42 in existence. You can now say that your $1 is no longer worth the same amount because it isn't as valuable since there is more money in existence. The supermarket owner knows there is more money available now which makes his food worth more money. So he raises his prices. This is INFLATION.

So think about this situation now. Federal Reserve creates $814 billion. The $500 sitting in your savings account no longer has the same buying power because it isn't as valuable. Companies know this and therefore raise their prices to meet the amount of money in circulation because they also have to pay more money to buy the products to sell to you! This is INFLATION.

So, how good are these stimulus packages?