I have an idea to start a business in my town. My business is that I'm going to hire employees and their sole purpose is to spend money at other businesses. To fund this business, im going to go to other businesses and ask them to buy my bonds that i will issue. Then I will give the money to my employees to go spend on goods from the other stores. Now I will sell them on this idea, because I will tell them that with all the money my employees are going to spend at their stores, it will create even more jobs in the community and that our "local" economy is all in this together and if they dont do it, people in our local community will be unemployed and their store sales will go way down and it will just be an over all disaster for the "local" community. Hows that sound? Its modeled exactly the way the US government does business except instead of using the word "local economy" use the world "global economy". If it works for them, it should work for me, right? I mean if the other countries of the world buy that crap, then surely joe schmo american will buy it too.
No...but i can print my own bonds and drastically increase the bond supply. Of course this will make the original bonds worth less unless i start lowering interest rates on the new bonds i issue so that people will keep buying the old bonds. I will let all the business' in my area know that if my company goes under...there will be less people to buy their goods and services and people will start losing their jobs in our community and they HAVE To keep buying my bonds because "we are all in this together" Some of you may ask how do "I", the owner of this business, make money. Well i will charge all my employees 35% of their paycheck for the honor of working for me. I think all the employees will not mind because their whole job is to just spend money. Oh and if i start running low on cash, I will just issue more bonds to pay off the original bonds. I think there another guy that had a similar idea... his name was Charles...something....something that started with a P...hmm...was it Peterson? No... that wasnt it...Piper? no...that wasnt it either....Oh yeah...Ponzi! Charles Ponzi! That was his name. Brilliant man he was. So brilliant, all our government leaders together with the Federal Reserve based our economy off of it. So if it works for them...it will work for me! Right?
The problem with the idea is that the powers that be are the only ones allowed to do it. If the average guy does it, he's arrested. If the government does it, well they have your 'best' interests in mind.
Greatest post of all time on elitetrader - Pelitraveller, give yourself a pat on the back. After 5 years, reading during breaks at work. This is hands down the best post I have read.
What services do you supply, the US govt builds and maintains roads, funds schools, defends the USA from enemies foreign and domestic, and removes criminals from our society, your only motivation seems to be monetary in nature and not caring for your nations citizens. Your model should instead be based on african goverments whom do a poor job of servicing the needs of there citizens, even though most of them are resource rich