Why Bail Outs Won't Work and the REAL CAUSE of our economic problems

Thankfully, President Obama is speaking to people about acting responsibly.

So why is it then that the entire country turning its attention to bailing people out?

It is amazing to me that nearly everyone (Republicans, Democrats, and the public at large) are only talking about two things:

1. How can I get some of the bailout money for me and what I want, or
2. How can we make sure the money is going to be spent wisely and isn't going to be wasted (on things they don't want).
   

But here's the truth:

All the money in the world (real, printed or borrowed) is not going to fix our financial problems.

Why won't these government bail outs solve our problems?

It's very simple really...

It's because our problems are not financial.

Our spiraling economy and financial problems are a symptom, they are not the cause. The real causes of our problems are dishonesty and a lack of education. And these two underlying problems are so widespread, they are now affecting virtually every industry and every American and other countries around the globe.

So many people have made (and are still making) serious financial mistakes, either intentionally (through fraud) or unintentionally (because they don't know better), that it is affecting virtually everyone today, even people who did not make any mistakes themselves.

And when these people get a bail out, or are kicked out of their homes, or they lose a job, etc., they end up on welfare or other government assistance, which means taxpayers end up paying for their errors.

But even with government financial assistance, the underlying problems continue, and so we continue to have millions of these devastating personal stories and huge bank failures.

And the problems continue to get worse.

So... WHAT IS THE REAL SOLUTION?

Only two things can ultimately fix our current problems... and they are both areas that our government as not been very good at delivering: Justice and Education.

People (who have been laid off, are drowning in debt and losing their homes), banks and businesses (that are teetering on the verge of collapse) need to understand that reality requires that they reap the consequences of their behavior (whether intentional or unintentional).

Justice is simply the recognition that it is not possible to reverse or avoid the law of cause and effect. It is critical that we change our understanding of the proper role of government: We must acknowledge the truth - that the government's role is to protect people's rights, not to protect them from the consequences of their bad decisions and their deceptions.

Bailouts, on the other hand, attempt to reduce the consequences of people's plight. Ultimately, you cannot cheat reality. You can only try to shift the responsibility for one person's or group's woes to another. The hope is that these problems will go away or be corrected "in the future." But by attempting to remove or reduce the negative effects of one's situation, without addressing their cause, the consequences only get worse.

Even if we mitigate the negative effects in the short term, the $64 Trillion Question remains... Can we fix the problems that caused it, and can we pay for our past mistakes?

A 'just' society is one which does not allow people to avoid the consequences of their behavior or the reality of their situation. It does not allow people to be distracted from focusing on the real source of wealth: productivity, and on offering real values to others.

If we are to be a 'compassionate' society, we must demand that justice is rendered so that everyone has to play by the same rules. If someone makes a mistake, we need to make every effort to make sure that mistakes are not repeated, and that people learn from their experiences.

But justice alone is not enough...

Unfortunately, even when people suffer the undesirable consequences of their behaviors, they often do not learn and are therefore condemned to repeat them.

The REAL SOLUTION is to make sure that all parties learn the lessons that they didn't know or practice that got them into this mess. We must focus on education.

For example:

• We need to teach individuals to be more entrepreneurial so that they can create jobs instead of lamenting that they can't find someone to give them a job.
  
  
• We need to teach people how to save for unexpected circumstances and events.
  
  
• We need to teach people how to invest properly (instead of acting based on greed or fear), and how to protect their investments from market volatility.
  
  
• We need to teach banks how to manage risk and extend credit properly.

Recipients of government handouts, bailouts, or loans are needing government help for a reason. We need to address that reason with the appropriate education and then put them on probation for 3 to 5 years, with regular financial audits until they can demonstrate that they can manage their income, their assets, and their finances honestly and responsibilty.

Until people and the government focus on fixing the real problems... lack of education (which was created by putting our trust in woefully inadequate public schools) and lack of honesty (which was created by rewarding fraud and failure instead of rendering justice)... the problems will continue.

And they will get worse and worse and worse.





P.S. I invite you to join me in focusing on the solutions. Help me educate and empower people to be part of the solution. Join my Make A Difference Campaign. Improve your health, your income, and the environment.

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