"Daily Wealth" Artikel vom 10. Februar 2009
Read This If You're Confused About What the Government Is Doing
By Dr. Steve Sjuggerud
February 10, 2009
If I drank coffee, I would have spit it all over the Sunday paper when I read about Jeff Kottkamp...
Kottkamp took 365 flights on the State of Florida's plane in the last two years. Two-thirds of those flights were between his home in Fort Myers and Tallahassee, the state capital. "Commuting" was against the law on state planes... until July 2008.
Seventy additional times, the plane flew empty after dropping him off. And Jeff wasn't alone... His entourage typically included a bodyguard and others. Dozens of times, his wife and kids flew free.
Who is Jeff Kottkamp?
Kottkamp is Florida's lieutenant governor. Sounds impressive... But according to the newspaper, the position "has few formal responsibilities." Former Lieutenant Governor Frank Brogan said candidates turn down his old job because "they don't want to become the person down the hall who has little or nothing to do."
Maybe Kottkamp does have something to do. But it's still hard to justify spending my tax dollars that way. I figure, if you're going to accept a job in Tallahassee, buddy, you've got to move to Tallahassee. No amount of explaining can make this one OK.
The thing is, governments everywhere are full of Jeff Kottkamps... wasting your tax dollars.
In fact, our federal government wants to embark on what may turn out to be the biggest financial boondoggle in history. It wants to spend hundreds of billions of dollars buying what may be the most overpriced asset in history – U.S. Treasury bonds.
Once again, no amount of explaining will make this one OK. I get it, I understand the idea... If the government buys Treasury bonds, it will push Treasury interest rates down. And that will eventually push down interest rates on mortgages and interest rates on corporate bonds, too, which would be good for our economy. That's the theory, anyway.
Treasury bonds now pay 3%. It would take an incredible amount of money to push interest rates on Treasury bonds back down to 2%, for example. But why bother? Would it really work?
In December, interest rates on 10-year Treasury bonds were just above 2%. That did almost nothing to push down interest rates on mortgages and corporate bonds.
And what happens when the government stops buying Treasuries? Chances are great the prices of government bonds will plummet... So the government wants to spend our taxpayer dollars to buy an overpriced asset that will crash.
Actually, our government doesn't have the money for this. So over the next few years, it will tax us to get the money it wants to use today to buy an overpriced asset destined to fall in value.
Government policy shouldn't be this hard... or this disastrous. Most of the time, the right answers for government come if you just think about it as if it were your family or your own business.
For example, if it were your own money, would you take a private plane 365 times in two years to commute to work?
Or would you take all of your family's money and borrow as much money as humanly possible from other family members to buy a fleet of brand new Hummers – destined to fall in value?
Whenever you get confused about what the government is up to, here's a little secret for you... Just take it back to the basics. Simply ask yourself this:
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If this were my family, or my business, would I spend my money this way?
Why can't governments... from the smallest municipality all the way to the new administration... abide by that simple standard?
Good investing,
Steve
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