Don's World - 200612 - Tanstaafl
There Aint No Such Thing As A Free Lunch
Get Ready - TANSTAAFL Is Coming
I Know, I Know; What the Hell is TANSTAAFL?
I first saw this strange word(?) in a news article several decades ago, and just like with you, it immediately caught my eye and hooked me into reading the article.
It’s actually an acronym. TANSTAAFL means There Aint No Such Thing As A Free Lunch.
The Hook worked on me back then and as I read on; I realized that this article that I probably would have ignored was actually very informative. So it Worked.
The Big PICNIC Was Necessary
Sure, I'm calling the recent enormous money distribution to the population a Picnic, but even I realize that it was necessary; it had to be big and it had to happen fast, so any of the problems that occurred when people got their checks are excusable from my perspective.
What I want to remind everyone of is the fact that all of our Income Taxes are going to increase at some time in the future; and increase dramatically, I believe.
First, let me explain that I do consider myself an educated man and I feel that I am knowledgeable on a number of subjects, including what I would call Basic Economics. But when it comes to the complexities of the World’s Economic relations, I may not be an expert, but I feel I can call myself an educated observer.
With that said, here’s something that I feel all of you, in the USA and around the World need to understand.
This acronym that I used is very applicable to our present financial situation because as it says, there really is no such thing as a free lunch.
And you need to understand that our government has just held a big picnic for our citizenry.
Understanding the real danger of this deadly CoVid-19 virus spreading and killing so many people, if it was not immediately contained, our government had to do something to help the populace so they did two things.
First of all, they essentially shut down our nations economy by restricting what were called “non-essential” business’. This was done to help isolate people from each other thus reducing the spread of “infected” people.
Secondly, they handed out several trillion dollars to everyone so that the enormous number of suddenly unemployed people could survive for a while without their jobs and income.
Don’t get me wrong; I’m sure this national (worldwide??) shutdown and the big money giveaway to the citizenry were necessary moves.
Remember, this shutdown of literally all “non-essential” business’ in America put hundreds of millions of the working people of America out of jobs for an indeterminate period of time.
The problem is that; sure the “big giveaway” was a necessary move for our nation’s population, but it established an increase in our national debt of several trillion dollars.
Hell, our government already writes billions of dollars in checks to the majority of the nations of the world; and I will not get into whether these giveaways are necessary or not, because that’s a subject for a much longer article in the future.
But even my feeble mind can see that economically we, as a nation now have a very big bill to pay.
But We Generated an Enormous Debt
What I am trying to warn you, my fellow Americans, about is that so many of the people I talk to don’t understand a simple truism; those checks were a loan, and not a gift.
Our government should have stressed this point to the public and stated clearly so that everyone understood, possibly by just saying; Oh, by the way, we (the existing government) are actually just loaning you this money.
That’s right folks, those checks were a loan.
You have to remember something; a government operates on a budget, just like you and I do. And, just like you and I, they always have to pay back the money they borrowed.
You should know that when our government printed all of those checks for trillions of dollars and then passed them out to us recently, at the same time they had to generate “notes of debt” (or whatever you prefer calling them).
When a government generates debt they do it by using one of several legal tools such as the simple Savings Bond, to other more complex government loans. People around the world purchase these bonds and then our government must pay the money back by a certain date and with interest included (of course).
The reason I mention this is that we all need to recognize this new debt, and prepare ourselves for the higher taxes that we will be required to pay to offset this debt.
I recommend that we all need to go back and look at our family budgets, especially if we have financial goals for the near future, and we should all prepare our budgets for increases, possibly significant increases in our taxes, especially Income Taxes in the near future.
Are We Heading Into a Recession?
A guy asked me one day; “What’s the Difference in a Recession and a Depression”
I thought about it and was trying to say something intelligent that put a definition on the two words, but after watching the confused look on my face for a minute, he held his hand up and said;
A Recession is when your Neighbor loses his job, and a Depression is when You lose your job.
I smiled to myself and I told him that he had just given me the perfect definition of these two words and what they represent to a working man.
Being a selfish person, let me say that the big question for me, a Senior with limited income prospects for the rest of my life is; will our economy (and the rest of the World’s economies) be pushed into another deep recession to cover this enormous debt along with the government ongoing expenditures being spent to support the research for a CoVid-19 Vaccine.
I can’t say, but to me when you and I, the working people, have even more of our income taken away from us to pay for our part of the recent necessary distribution of money, then we will be by necessity purchasing less than we did before this disease hit us.
This reduction in spending power will naturally lead to reductions in jobs and other situations that will then in all probability lead to what we are used to calling; a recession.
How Do We Pay This Debt?
Once I understood this new financial situation, and the impending problems our governments have generated as we helped ourselves get around the immediate possibility of dying from this CoVid-19 disease; my mind started working on what we should do to reduce this new debt.
But, do I have a solution? No, I told you at the beginning of this article that I may know a little something about economics, but I do not have the training to develop a good international plan that will minimize the effects of these “loans” on the working people.
I only know that the one immediate thing we need to do is develop a vaccine for this disease and get everyone back to work as fast as possible.
And I feel that the second thing we need to do is kick our own economic butts and get our nation into the biggest economic boom in the history of the world.
Folks, Sooner or Later, this big Bill will Come Due!
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This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Don Bobbitt