Truth about the bailout.

I received “AIG bailout Solution” email about a week ago, and after reviewing it, realized that the math was completely off.  They claim that if you split $85 billion between the 200 million or so adults in the US that each would receive $425,000. The math is simply wrong and that number is in fact $425.

Here’s the scary part…

The day before receiving this email I had a discussion with my brother; he used the same number ($425,000) when talking about the $700 billion bailout. He apparently heard it on the radio along with thousands of other people. I tried to explain that the math was wrong but I myself didn’t pick up a calculator to figure it out.

So you have to ask yourself…

Are we all that ignorant or gullible that we don’t even pick up a calculator?

(Ask any 7^th grader this question. If you have 200 million people and gave each $1,000, how much money would you have spent? The answer is $200 billion dollars which is far more than the $85 billion we are discussing!)

Was this email sent as propaganda or was it an honest mistake?

(Propaganda – information, ideas, or rumors deliberately spread widely to help or harm a person, group, movement, institution, nation, etc.)

Making mistakes is ok as long as you are willing to make them right. Obviously this information has been spread throughout the internet (Google – AIG bailout Solution) and also in the media and there are people out there that are looking at this issue through the eyes of misinformation.

Since this email was created our government passed a $700 billion dollar bailout (which doesn’t include the $600 billion pumped into the economy on Sept 29^th ) to help the banks recover for their own greed and I think it is important that everyone should understand what impact it will have on them and their loved ones. This information is based on facts and can be verified by literature created by the Federal Reserve itself. To understand this further I Highly recommend you watch the first section of the online movie “Zeitgeist – Addendum”.

(See – Modern Money Mechanics written by the Federal Reserve Bank of Chicago)

Money is created out of debt. When the government needs $700 billion dollars they create treasury bonds which they exchange with the Federal Reserve for the new money. This money must be paid back with interest and with a little research you will realize that this is why the IRS was created and you pay taxes. This also doesn’t take into account inflation which is essentially is a hidden tax but I’ll get back to that later. 

(See – Freedom to Fascism)

Creating new money to bailout ailing companies and banks is like the following scenario:

A college student who doesn’t have a source of income was extended three credit cards. After splurging on new cloths, a flat screen TV and beer for everyone, he is thousands of dollars in debt. Unable to make the monthly payments he applies for and receives another credit card just to pay the monthly minimums on his first three cards. As you can see from this example the problem of spending and making poor decisions were never addressed. He will pay for these debt in the future or find himself in financial ruin. If the trend continues it may be future generations that will suffer because of his poor money management.

Although this example is very basic it is by no means the extent of our problems because it doesn’t take into account the magic of our monetary system.  Money in the system can be expanded and contracted at the Federal Reserves discretion. I will leave it up to you to watch “Zeitgeist – Addendum” and research Modern Money Mechanics written by the Federal Reserve Bank of Chicago so that you have a better understanding but in a nut shell the $1.3 Trillion created last week could potentially become over $10 trillion in new money.

Here is where inflation “effect” (not actual inflation) comes in because of a weakened dollar (dilution). Unless we are able to produce more in the way of goods and services which is highly unlikely considering the current job market and business closures, you will find yourself paying a whole lot more for the things you need to survive. We are about to see a financial disaster unlike any ever experienced and unless we look at the current money system and make the needed change to get our economy back in line.