Financial Planning

This is uncle Shaun, back for another edition of Financial Planning! With the recent congressional decision to give $800 billion to businessmen who have failed at life, a lot of readers have asked me how they can start their own financial crisis so they can get some free government money too. Can’t blame ’em. After all, if you get your own financial crisis going, maybe the government will give you a trillion dollars to lose as well!

Sound snazzy? We need to first figure out what’s happened in the past. I mean, this isn’t the first time we’ve had economic problems. Maybe we can find the secret to solving the problem by just slowing down and blaming someone. Let’s get started:

1929-1939: The Great Depression

Yeah, the big daddy of all crises: the Great Depression. A full 25% of everybody lost their jobs, and the stock market dropped about 90% in 34 months. But, that’s not all! The government ended up doubling the spending to combat the depression! This huge increase in government led to instant success … after only a full decade of the worst depression in the history of the United States. Thankfully, it only took World War II and millions of lives being destroyed before our economy could snap out of it.

The cause of the depression is actually pretty simple. The Federal Reserve was new at the whole “pretend money” thing, and made some miscalculations. A year after trouble started, Congress chipped in and decided to smoot free trade with the (I kid you not) “Smoot-Hawley Tariff Act,” which restricted commerce with other countries.

So, what are the secret ingredients for the Great Depression?

• Start a Federal Reserve and Print Money
• Increase Government Spending
• Restrict Free Trade

1973: Oil Crisis

You know the oil crisis? That was caused by OPEC governments getting together to form a club to raise prices to help their economies. It worked; they just needed our money to do it. Rule of thumb: in terms of making your own financial crisis, two governments are always better than one.

Don’t forget, this was also coupled with the outlandish spending in Vietnam. Justified or not, that little war cost money, and had some economic hits.

So, what are the secret ingredients for the Oil Crisis?

• Increase Government Spending
• Start a Government Club
• Start a War

1980s: Recession

They didn’t come up with a fancy name for this recession, which is a shame. But still, there’s a lot to be learned. The Iranians had a major fall-out with, well, other Iranians, leading to more government changes impacting everyone else on earth through higher oil prices.

Back in the US, our government tried to keep up. The Federal Reserve jumped into crisis-making mode and severely restricted the creation of fake money. Jimmy Carter, during the late 70s, heavily restricted the energy sector, causing an incredible amount of the energy problems after he left office.

The recession finally ended, unfortunately, after Reagan stopped the 70% tax on the rich people — you know, the guys who start businesses, invest and stuff like that. After this sudden boost to the economy, the crisis was averted. We’ll get’em next time.

So, what are the secret ingredients for the 1980s Recession?

• Have the Federal Reserve Do Anything
• Start a War Somewhere With Oil
• Increase Taxes for the Rich

2008 Financial Crisis

Now this is a biggie. You’ve probably heard all about this baby, because business failures in a lot of big financial companies complained and got a little under a trillion dollars handed to them. They got government money because they failed at making money on their own, once-and-for-all proving that the government doesn’t just give unearned money to poor people. It’s not about being rich or poor when it comes to getting political freebies — it’s about how bad you fail. Fail big, get big. The New American Way.

The causes of the financial crisis are up for lots of debate by red-faced economists. It’s a touchy subject as to why the government influenced companies destroyed the entire market, especially since it’s obvious that it wasn’t the government’s fault at all — it was freedom’s fault.

But nevertheless, here are a few causes:

The Community Reinvestment Act was started by Jimmy Carter (we talked about him earlier; nothing like a good legacy) who really cared about poor people. He helped pass this law which basically encouraged banking companies to focus more on giving than making. This is how to run a business if you are wanting to fail, as we’ll talk about in a minute.

In 1994, Monica Lewinski’s ex (who also goes as “Bill Clinton”) decided to encourage the part-government, part-private company Fannie Mae to give out loans to poor people who couldn’t afford the loans. This was no time for math, economics and the truth, this was time to do something that feels good.

The New York Times also gives us some insight on the cause of the crisis, from 1999:

“… the Fannie Mae Corporation is easing the credit requirements on loans… The action… will encourage those banks to extend home mortgages

to individuals whose credit is generally not good enough

… Fannie Mae… has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people…

borrowers whose incomes, credit ratings and savings are not good enough

… Fannie Mae is taking on significantly more risk… the government-subsidized corporation may run into trouble… prompting a government rescue… the move is intended in part to increase the number of… home owners who tend to have worse credit ratings…”

It’s worth noting that this is the reason the crisis is happening; after all, not all financial companies are going under. Just those who were encouraged by Clinton. There are tons of loan companies that are doing just fine and aren’t going to cost us trillions of dollars — those successful jerks.

So what does it take to fail big? Simple:

• More Government “Credits” (spending!)
• More Government “Encouragement” (restriction!)
• Give Money to the Poor (redistribute wealth!)

How to Make Your Own Crisis

Okay, okay, okay; enough about the history lessons, let’s make our own, alright? All we need to learn how to make our own crisis, so the government will give us free money too. As we talked about above, this is actually pretty easy. Just call your government, and have them do the following:

• Give Unearned Money to the Poor
• Have the Federal Reserve Do Anything
• Start a War Somewhere With Oil
• Increase Taxes for the Rich
• Increase Government Spending
• Restrict Free Trade

Lucky for you and I, it won’t take much to do these things, especially with the panic that we see because of the current crisis. Heck, we just spent about a trillion bucks! The steps are easy, and they just take a courageous congressperson — these are relatively cheap. A luxury cruise, a mansion or just some cold cash and you can have several.

Have I left anything out? Or do you have any new ideas for starting your own crisis? Tell me about it below. I’m all ears.