Yesterday the Fed decided to buy more debt in order to get the country back on its feet. It will buy $40 billion of mortgage debt per month for the foreseeable future until the country starts adding more jobs.
This new promise of free money was met with cheers by Wallstreet investors and the promise of more heroin – er, I mean quantitative easing – blasted the stock market off like a kid on a sugar high.
Whew! Just in time too because the huge increase in jobs by the last two QEs was just beginning to wear off.
I just don’t see how it can work ya’ll. Maybe I’m some dumb hick living up in Maine, but like I said before: If I tried to run my finances the way the country does I’d have been locked up a long time ago. I’d have bought a new Lamborghini, a new high rise in downtown Manhattan, threw outrageous parties, and basically lived the lifestyle of the rich and famous (is that a tv show?) and paid for it out of my check book. Just because there’s no money in that account wouldn’t cause concern. Why? Because I’ve got more checks, dummy! Sheesh! As long as I have blank checks I’m good to go. Right?
Well, it seems to me that eventually this all going to catch up to us. At some point the debt is going to come due and someone, somewhere, is going to say, “Pay up,” and when we can’t the proverbial shit is going to hit the fan.
At some point Americans are going to feel what it’s like to have austerity measures. I’m not talking not being able to take your dog out for a pet grooming and getting your nails done. I’m talking about those who are living on the government dole suddenly finding out that Uncle Sugar ain’t gonna be there with another check and now they’re on their own. That’s austerity.
We’re going to have to cut back on the riches we take for granted. No more brand new houses and cars we can’t afford. No eating out all the time because we don’t feel like cooking. No cable tv because that money is going to be used to buy food that the government is no longer handing out. That’s austerity.
Finding out the government will no longer take care of you in your old age because that money has gone to pay the country’s bills. That’s austerity.
The developed nations – those who have been living above their means – are eventually going to feel the sting of doing without things we’ve become accustomed to. I don’t know if there will be a complete breakdown of society, but I can certainly see things getting tight for people who aren’t used to going without.
It’s possible that I’m wrong and that another round of QE is just what this country needs to get out of debt. If QE3 turns the ship around I’ll be the first to say, “I was wrong and I’m here to eat a little crow for Ben and the government,” but I don’t think I have to worry about that.
What do you think?
Sound off below!