What if we’ve been led to believe money we THINK is an asset is really just a liability (debt)?
Imagine giving your teenager a credit card. After the bills come in you realize your teenager was undisciplined and didn’t want to stop charging when the card maxed out.
The bills come in but are more than you can pay. You get past due and go into collection. You have to file bankruptcy and get sued. That’s the end of it, right? Just take the card away from your kid. It’s over. You’re safe.
But that darn teenager starts printing his own credit cards and putting your name on them. He’s going into debt and using your name to do it. He’s promising you’ll make the monthly payments in the future. But you’re tapped out. You’ve run out of income to pay.
So how does your kid keep spending and convince the bank to keep lending? He finds someone else’s parents to make the payments. And he continues the process over and over.
He gets to spend and never be responsible for the debt. He’s getting money for nothing. The bank is making profit on the interest and your teen is happy because the spending is endless. Eventually your teen will run out of parents willing to make his payments, right? Yes he will. But not until enough parents get sick and tired of not being able to pay their bills.
Congress is your teenager. The Federal Reserve Bank is the credit card company. You and your fellow taxpayers are the parents willing to make the credit card payments for spoiled, undisciplined child. The Federal Reserve bank and Congress don’t care who makes the payments as long as the payments are made.
Did I forget to mention the credit card “bills” your teenager keeps running up are the same as the dollar “bills” you hold in your purse or wallet?
To Your Financial Education,
Greg Whitaker
Copyright 2012, All Rights Reserved
