Saturday, November 28, 2009

The US as we know it is dead

In an economy two sectors provide employment; private and government. When government grows it does so at the expense of the private sector. This is the case right now in the USA. This may be ok for a while but then where do the government get the revenue for its programs? It can do one of three things; increase taxes on the population, decrease the size of government or increase the money supply. The first one will lead to more hardship for the already overtaxed population. The second; well what are the odds government will get smaller with government being involved in banking, insurance sector, mortgages and now soon to be; healthcare. The third one; well that will lead also to increase taxation on the population via inflation

There is a real possibility the Government will increase taxes on the rich; this will not work. Increasing taxes on the rich may work for a short while, however, over the long term it will not. Eventually the rich will pack up and leave either physically or at least their business interest, taking even more jobs with them. The government will try to stop this by limiting the movement of wealth. They have already taken some drastic steps by imposing themselves on the Swiss government resulting in the loss of anonymity which is what made the Swiss banking system worked as well as it did. If anyone wants to start moving wealth out of the US they had better start doing so soon, because the US is becoming more and more of a communist state in the laws they are imposing; from security to finance people are losing their privacy and freedom.

There are a lot of changes to be made if the USA is to ever go back to what it used to be, I doubt whether we will see all of those changes. At least not over a short time

If anyone doubts that the US is getting more and more into financial trouble here is one last bit of information for you; current government spending as a share of GDP is around almost 40%. The last time it went over 40% was during the Great Depression.

I strongly believe hat the US is dead as we know it and will never go back to what it was during the last 30 years. Yes, like I have before, life as we know it in the US has changed forever.