The post is half right.
There's no such thing as government funded, it's either taxpayer funded, inflation funded, or debt-funded.
Taxpayer funding is the most honest of them, you take money away from people to spend it.
Inflation funding is the least honest of them, you take money away from the poor and middle classes and hand it to the rich.
Debt funding is the most evil of them, you spend money and sell your kids into slavery. Fuck them, I want my $2500 skinny check!
There's no such thing as government funded, it's either taxpayer funded, inflation funded, or debt-funded.
Taxpayer funding is the most honest of them, you take money away from people to spend it.
Inflation funding is the least honest of them, you take money away from the poor and middle classes and hand it to the rich.
Debt funding is the most evil of them, you spend money and sell your kids into slavery. Fuck them, I want my $2500 skinny check!
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Inflation is great if you're invested. Lots of broad investments have been doing 10% or 20% in the past year (often beating not just headline inflation but the actual inflation rate they're lying about). Meanwhile, anyone who gets a certain amount of currency has significantly less year over year. Wage earners who have savings make less this year than they did last year and forevermore from here on and lost some percentage of the wealth in their savings account.
You can call them "future taxpayers", but that sounds awfully euphemistic to me. A bunch of people get free goods and services and sometimes cash payments without having to pay for it by forcing people who havent even been born yet to work to pay for it. What is slavery if not forcing people to work for you who don't have any choice in the matter and they are not getting anything in return?
You can call them "future taxpayers", but that sounds awfully euphemistic to me. A bunch of people get free goods and services and sometimes cash payments without having to pay for it by forcing people who havent even been born yet to work to pay for it. What is slavery if not forcing people to work for you who don't have any choice in the matter and they are not getting anything in return?
>Savings aren’t as bad since interest rates have gone up along with inflation. At least here in the US.
That may be true in some specific cases, but overall it's not true at all.
I checked a few big US banks -- US bank, Citi, and bank of America, and they look a lot like Canadian banks -- paying a fraction of a percent in most savings accounts.
The problem is the nature of bonds. When you buy a bond, you buy it at a certain price with the understanding that it will pay out a certain yield at the end of its life. So for most of the blast 10 years, most bonds have been making basically nothing, since one of the goals of qualitative easing is to help keep interest rates of bonds lower by buying up whatever bonds are needed to keep those rates low. Then you also have low Central Bank interest rates and so the banks themselves can also borrow money extremely cheap from the central bank, which doesn't directly affect bond rates but does inform buyers who tend to be big banks.
So you might be asking yourself "what does that matter we're not talking about bonds a couple years ago"? Well the problem is that just because new bonds are coming onto the market at a higher interest rate does not mean that the existing bonds are at that higher interest rate. And so what happens is the price of the existing bonds on the market goes down because there are now bonds on the market which are making a pretty good return. The bond ETFs that I invested in did terribly during this about of inflation because the assets inside those ETFs were all garbage, paying out virtually nothing. It's only the new bonds that are actually worth investing. Well, just like my bonds ETFs still have all those old bonds, so do banks. And so while Banks would like nothing more than to get their reserves up by borrowing more money from the customer through their savings accounts, they can't do that because the money that they have locked up in assets which would be the bonds is actually losing money right now, and so they can't pay more for their debts which would be the money in the savings accounts. Therefore, interest rates in savings accounts at large banks are remaining extremely low, and we're also facing lots of bank failures because other than the two big to fail banks, a lot of banks are now sitting there with extremely safe portfolios of the same bonds as my bond ETF, and they're losing money like crazy because who would buy these old bonds at any kind of price like what you paid for them before when you can get new bonds that are going to pay you four or five percent?
In spite of the fact that it hasn't really increased savings accounts anywhere, it's still a good thing for interest rates to be rising and for the central bank to be pushing that. Inflationary spending is attacks on the poor and middle class and to the rich, and that's not unique to today. If you look at the collapse of the Spanish empire, or the final days before the French revolution, and the nadir of the Weimar republic, these nations thought that they had stumbled on a cheat code by just printing more money which ultimately led to horrific outcomes, and even though it's good for the rich and powerful in the short term, it has sent them to the gallows and concentration camps ultimately. Often we make the same mistakes here because the story tends to play out over multiple generations, and when things are moving so slowly it looks like pure winning for decades until the party stops.
That may be true in some specific cases, but overall it's not true at all.
I checked a few big US banks -- US bank, Citi, and bank of America, and they look a lot like Canadian banks -- paying a fraction of a percent in most savings accounts.
The problem is the nature of bonds. When you buy a bond, you buy it at a certain price with the understanding that it will pay out a certain yield at the end of its life. So for most of the blast 10 years, most bonds have been making basically nothing, since one of the goals of qualitative easing is to help keep interest rates of bonds lower by buying up whatever bonds are needed to keep those rates low. Then you also have low Central Bank interest rates and so the banks themselves can also borrow money extremely cheap from the central bank, which doesn't directly affect bond rates but does inform buyers who tend to be big banks.
So you might be asking yourself "what does that matter we're not talking about bonds a couple years ago"? Well the problem is that just because new bonds are coming onto the market at a higher interest rate does not mean that the existing bonds are at that higher interest rate. And so what happens is the price of the existing bonds on the market goes down because there are now bonds on the market which are making a pretty good return. The bond ETFs that I invested in did terribly during this about of inflation because the assets inside those ETFs were all garbage, paying out virtually nothing. It's only the new bonds that are actually worth investing. Well, just like my bonds ETFs still have all those old bonds, so do banks. And so while Banks would like nothing more than to get their reserves up by borrowing more money from the customer through their savings accounts, they can't do that because the money that they have locked up in assets which would be the bonds is actually losing money right now, and so they can't pay more for their debts which would be the money in the savings accounts. Therefore, interest rates in savings accounts at large banks are remaining extremely low, and we're also facing lots of bank failures because other than the two big to fail banks, a lot of banks are now sitting there with extremely safe portfolios of the same bonds as my bond ETF, and they're losing money like crazy because who would buy these old bonds at any kind of price like what you paid for them before when you can get new bonds that are going to pay you four or five percent?
In spite of the fact that it hasn't really increased savings accounts anywhere, it's still a good thing for interest rates to be rising and for the central bank to be pushing that. Inflationary spending is attacks on the poor and middle class and to the rich, and that's not unique to today. If you look at the collapse of the Spanish empire, or the final days before the French revolution, and the nadir of the Weimar republic, these nations thought that they had stumbled on a cheat code by just printing more money which ultimately led to horrific outcomes, and even though it's good for the rich and powerful in the short term, it has sent them to the gallows and concentration camps ultimately. Often we make the same mistakes here because the story tends to play out over multiple generations, and when things are moving so slowly it looks like pure winning for decades until the party stops.