Tuesday, Dec 16, 2008
The biggest scam of all: Governments saving us from the bust
MoneyWeek: The biggest scam of all: Governments saving us from the bust
Never mind dodgy hedge funds swindling billions out of investors, Governments are doing the same to taxpayers. But all their misguided efforts at 'fiscal stimulus' will be in vain. In fact, they may even make things worse...
Posted by damien @ 11:20 AM (670 views) Add Comment
6 Comments
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1. gardeniadotnet said...
Throughout the legal proceedings Mr Ponzi maintained his wonted assurance. The streets surrounding the Court House were filled with persons eager to catch a glimpse of the financial "wizard". Sentiment towards him was by no means hostile ; many persons expressed the opinion that he was being persecuted, and would, if given a fair chance, pay off his debts.
2. paul said...
A well written article damien.
There are many measures being put in place In The Name Of Saving Us which are deeply questionable. I think you could have gone further to say that a new word will enter the UK vocabulary;
Seigniorage
http://en.wikipedia.org/wiki/Seigniorage
3. Matt said...
great blog it's good to see someone using a blog for what it is actually meant for look forward to seeing further comments.
4. techieman said...
"Yet continued calls for 'fiscal stimulus' and government spending suggest that investors still believe in the biggest scam of all – the idea that governments can control the economy and save them from the bust.
They'll learn soon enough."
5. Minx_man said...
I know MoneyWeek clearly sides with this site but sometimes it ends up sounding like the classic "would've been" type. They spend rather a lot of time criticising what's going on in a kinda "know it all attitude", and whilst I agree with most of it, they are rather light in the "this is how we fix it" department.
MoneyWeek also seems famous for sweeping statements eg "Thus you end up with zombie industries, and public sector non-jobs, which drain money from the productive economy. That leaves you with Japan."....I wonder if this journalist has ever been to Japan. No doubt Japan has its share of government non-jobs but one must not forget that even during Japan's decade long "recession" they were still way better off than we were in our last decade of plenty.
Point : we all agree we're in a mess and that the government are probably doing as much harm as good, but lets not lose our credibility with "cheap" journalism.
6. paul said...
I think there is a real danger that the government will continue to frame the current crisis in terms of solutions that solve government problems first, and economic problems second.
For example, the correct solution to the crisis would have been removing tax on savings, because there are 6x the number of savers in the UK as borrowers.
The UK's current strategy of very low interest rates, raised inflation (still over double its 2% target and not falling rapidly any more) and currency devaluation primarily serve the government's purpose of reducing its debts, and frees up a relatively small amount of cash for those severely indebted as a secondary aim.
George Soros has indicated that as long as governments continue to hijack the problems to solve their own problems instead of the wider problem, their tinkering will only make the problems worse.