Lesson Learned: Big is Bad, Very Bad!

The neo-reality of this 22nd century is that big is bad, very bad. Big government, big banks, big bailouts, big leverage, big liabilities and big debt are all very, very bad.


The world has been on a big binge and it is time to pay the proverbial piper.

Europe decided that bigger is better and created the European Union and a new currency, the Euro. What Europeans failed to recognize is that most of the member nation governments were big government socialists. These governments would continue to grow, their programs to help the needy would expand (primarily via the redefinition of needy) and everything would be just fine or so everyone thought until now. Socialism dislikes private property ownership. Central governments took more and more land and property in the form of taxes to expand government.

When these governments ran out of people to tax they began to borrow, and borrow they did in a big way.

The United States is on the same path as Europe. Taxing and borrowing became reelection strategies for both political parties. When the people rejected more taxes, borrowing became the new narcotic or the political class. Borrowing leads to hedging, which leads to leveraging, which leads to the inevitable - bankruptcy. Sovereign nations in Europe are facing bankruptcy.

So where is the money coming from?

From banks of course. Banks were and are still looking to lend to governments and by doing so have leveraged themselves into oblivion. According to Greg Hunter, former investigative reporter for ABC and creator of USAWatchDog.com, "I keep hammering away at the fact the Fed doled out $16 trillion in the wake of the credit crisis of 2008. This is an enormous sum that is greater than the all goods and services produced in the U.S. in a single year. Domestic banks and companies got the money, right along with foreign banks and companies. In effect, the Federal Reserve bailed out the world financial system. Now, we are right back to square one facing another financial meltdown with European banks and sovereign debt. If the Fed spent $16 trillion, why in the heck is this problem not fixed and why isn’t the world economy taking off like a rocket?" [My emphasis]

The simple answer is it wasn't enough money.

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