The US economy is One Big Ponzi Scheme
The Ponzi scheme (named after Charles Ponzi) is an investment system that pays returns to investors from their own money or money received from subsequent investors, but not from profit earned. The system is designed to fool new investors to give money on what appears to be a high return investment. (Like what recently happened with Bernard Madoff.)
I read in some articles, I think it was in seekingalpha.com an analyst compare the US economy to a big Ponzi scheme. That’s kind of what it is if you really think about it.
The government is printing more and more money to bailout banks. The government already owes trillions in deficit and will be in worse shape as more and more baby-boomers retire. Americans save very little on average as a rule. The US economy is run on debt.
Now the US government is encouraging American households to get into more debt to get the economy going. (Instead of paying off bad debt, saving money (and investing it wisely) and being financially responsible which is what the whole country needs in the long run. They keep putting off the inevitable, putting band aids. Note the cash for clunkers program. Get rid of your old car that probably still works fine, get into some more debt with a nice new car you don’t need.
At some point this house of cards is going to fall and even a financially unknowledgeable person like me can see that.
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