Vox Day reports on an interesting event overseas; evidently a gentleman (loosely speaking) who had received $120,000 from Exxon Mobil managed to get rid of it all in four months by giving most of it to his 10 wives and spending over $20,000 to buy another wife. This is, of course, a classic example of a short term time preference, along with giving a bum a buck for "a sandwich", or perhaps Michelle Obama's alleged shopping spree while in Spain.
He further notes, and is correct, that capital formation, and the accumulation of wealth and long term prosperity, relies on a longer term time preference, so any nation that (like, say, the United States) consistently takes from those who save and gives to those who don't is, economically speaking, doomed. It will torpedo economic growth simply by diverting money from capital investment to spending. The Chinese and Thais will profit as a result.
Note also that "demand side" economics is essentially this phenomenon, and it's a core to the Keynesian "orthodoxy" that characterizes our current leadership, so invest in precious metals (gold, silver, brass, copper clad lead, and ordinance steel) accordingly.
Our economy will recover if, and only if, government stops rewarding spendthrifts. Unfortunately, even if the GOP retakes both houses of Congress, I don't see this happening. I hope I am wrong.
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