Daily Journal

10 oversimplified steps illustrating why the bailout is bad idea from a historical perspective

And 8 easy ways to fix it

by David Kelsen

Here is the chain of events as it has played out over and over again, throughout history, because people just don’t pay attention.

  • A country incurs an expense it cannot fund organically
  • A country borrows from a source other than it’s own government to acquire the funds necessary to complete or continue whatever that thing is.
  • After much more borrowing, the country no longer has the ability to borrow
  • A country decides to print more currency (or make currency available based on a theoretical expectation) to further support the thing, whatever that is
  • The amount of money (or the promise of more money) increases, the amount of goods and services do not
  • Demand increases with the advent of more money, the costs associated with suppling the new demand increase incrementally
  • Prices go up – goods and services progressively become less affordable – money is devalued
  • A country sets price limits on goods and services
  • Suppliers and manufacturers can no longer afford materials or the labor to produce materials –  supplies diminish – people starve (or fling themselves from buildings and bridges)
  • Rationing rears it’s ugly head – unemployment and crime grow like bacteria on roadkill


Maybe…, well actually no, events similar to this have been recorded as early as 218 A.D. in Rome.  If interested look up Diocletian, John Law, Germany (1920-1923) or just google “Hyperinflation”.  This is not a new thing, and yet the powers that be insist on reliving the past, as in:

“My foot is still bleeding from the last time I shot a hole in it”.

What do we do?

  1. The housing market needs to hit bottom (estimates; late 2009 to mid 2010)
  2. Financial derivative bundling needs to vanish
  3. Companies that operate poorly need to fail
  4. Banks that participated in funky practices need to take the hit.
  5. Executives that commandeered a failed business and/or presided over questionable practices need to be compensated on bottom-line performance
  6. Politicians need to leave the party behind and start working for the people and the country (instead of their buddies)
  7. Oil companies should disburse profit-sharing checks – TO THE WORLD POPULATION
  8. Potato chip packagers need to fill the damn bag

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