by John Weber

Created on: February 16, 2009   Last Updated: March 17, 2009

Through Worth and Work (not credit) We Rise

Nearly a hundred years ago, my grandfather rose at five, milked his cows by hand then delivered the milk by team and wagon to a nearby depot. A stonemason by trade, he would return by seven, then spend a ten-hour day squaring stone with a 12-pound hammer.

"And you know," I remember him saying, "we never got coffee back then."

There were lots of things grampa never got: trips to the islands, DVD players, large screen TV's, or a mortgage he couldn't handle, "but you know," he added, "everyone was happy 'cause we were all in the same boat. Poor as Joe's turkey, but we had a whale of a good time."

I think of grampa a lot these days; poor, hardworking, but happy and I wonder what he'd make of my spendthrift generation and a government stimulus plan in the hundreds of billions. No I don't, I realize. I know. he'd think we were crazy, living on credit we didn't deserve. The President of Euro Pacific Capital, Peter Schiff, says he'd be right.

"The last thing we need in this country is more borrowing," he says. "The government is trying to encourage more consumption when we're in trouble because of all the excess consumption. We actually need the tough medicine that the free market is trying to force on us. We need Americans to spend less."

Despite President Obama's stimulus intentions, Shiff says you can't revive an ailing economy with the very medicine that's making it sick. Now or later, he says we have to pick our poison and pay for years of reckless borrowing and spending. Now would be better.

"If Americans are saving their money, they can't spend it and that means we're going to have to have a very severe recession. The government has to fess up, level with the American public, and let them know this is going to be tough. Because if the government continues on this course they're going to create an inflationary depression that is going to be much worse than anything we've ever experienced."

While President Obama has been warning Americans that things will be bad if his stimulus plan isn't enacted, Shiff says he's only half right: "terrible" if we don't act, "unmitigated disaster" if we do.

"The government is now borrowing and spending because Americans are too broke to do it. But it's making the problem worse. And when the bubble finally bursts in the bond market, that's going to knock the rug out from under everything the government is doing."

In short, he says, the government will be broke and in need of it's own bailout.

"And

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