I am going to paraphrase my favorite author, a Midwest born and raised graduate of the U.S. Naval Academy.
Let’s talk about the economy in three parts-first we’ll leave MONEY out of the definition. So, our economy has basically two other parts-production and consumption.
It is evident that our country is capable of PRODUCING goods and services-sufficient to provide to every citizen a life style that includes all the basic necessities-clothing, shelter, food-actually we are CAPABLE of producing an ABUNDANT lifestyle for our citizens. We have the factories, we have the farms, we have the distribution systems-but we’re doing two things:
1. We are not producing at our capacity in most areas
2. We are paying not to produce or storing and/or giving away production in other areas.
Why?
Because the consumption side is not working-people can’t afford to buy the necessities that we can produce, and certainly not able to buy the ABUNDANCE that we can produce.
What’s going on?-Well, most of the ability to buy what we can produce is in the hands of a relatively small percentage of the people-so they buy all the items we produce that they need and want and either spend large sums on ostentatious luxury, or invest so that can possess a greater income so that they will become even richer. The great majority of our society is living on the edge of disaster. To lose a job-is to lose the place to live, the car to go to work, education for the children, and adequate and appropriate food to feed the family. And in addition-a goodly number are ALREADY unable to provide the basic necessities of life.
So there are attempts to balance production and consumption. Businesses send jobs overseas to lower the cost of production, this can lower the cost of the items and theoretically make it easier to buy the items/goods/services. However, in sending the jobs overseas, jobs are lost here-it doesn’t matter how much you lower the price if the consumer has no income, he can’t buy. Other ways-pay not to overproduce-pay the farmer not to grow food-doesn’t sound logical when people in this country are going to bed hungry. Buy the food and don’t sell it-keep it so the price remains high-that doesn’t sound logical-buy something and not use it when people need it. It doesn’t seem that trying to fix the production-consumption balance only from the production side doesn’t work because you lower production-cuts jobs and the ability to buy-or you pay not to produce and that lowers jobs and makes the produced items cost more-so not able to buy.
So, look at the consumption side. We know why people don’t buy—they don’t have money. Why don’t they have money-jobs are being sent overseas to lower cost and increase profit, less jobs, less ability to buy-lowers production-downward spiral. So, we provide charity-money to buy necessities-but really doesn’t balance production-consumption-they are not given much, so they can’t buy enough to create a need for more production-so no jobs created. OR, we create make work jobs-we don’t need what is produced by that-so all that does is charity that you work for-not enough money from the “job” -because it is an unnecessary job-so they don’t buy enough to create more production.
So, we currently have a system that is capable of producing an abundant life for our citizens, but there is an imbalance in the production and consumption parts of our economy. We have a society where the people need things that they can’t buy. The producers and merchants have things they want to sell very badly, but are unable to sell them.
This is illogical. Wouldn’t it be better if people in dire want had the money to buy the things they need from the producers and merchants who have to sell or go bankrupt? So, what is the problem? MONEY.
Now let’s define money-what is MONEY? Money is ANYTHING that can ALWAYS be swapped for goods and/or services. That implies that the person who receives it for HIS goods/services knows that it can get for him what he wants in goods or services. The best measure of what is money-will the government take it to pay taxes and can you get something of value for it. MONEY is NOT GOLD-we haven’t been on the gold standard for a long time-they aren’t even silver certificates-money is whatever we can use to buy something and we will accept to sell something. United States Constitution Article 1 Section 8 “To coin Money, regulate the Value thereof, and of foreign Coin…” So, the U.S. can “coin” money and regulate the value of the money. So, the US could say that the value of a dollar is one loaf of bread or a new Cadillac. However, the market will adjust that value-the store may require only 1/3 of a dollar to buy a loaf of bread-or it could say two dollars for a loaf of bread—over time, the market will determine the value of a dollar. If the value of money is really set by the market, then we also need to understand that “The sum total of the purchasing power of the public is less than the total price of the goods/services offered for sale.“
The problem is that the U.S. BORROWS MONEY-from people/countries/banks-which is the National Debt. Wait a minute-didn’t the Constitution say “to coin money…regulate the value” of money…so why borrow? Why not print the money we need?-INFLATION-that is when people don’t think that “money” is worth as much as it is supposed to be. INFLATION IS EVIL-we have been told so!—Who does inflation hurt-Banks-the “money” that they have isn’t worth as much-that means you pay off your loan (house/car/credit card) with money that isn’t worth as much as when you borrowed it. But, the other side-inflation-normally means your salary (earnings, Social Security) goes UP so you can buy stuff cheaper. Inflation hurts the rich-their investments are worth less-they get less income from their stocks and bonds. Lenders are hurt by inflation-they are like banks.
So, the only reason, it seems to me, that we borrow money and create the National Debt-is to make the rich richer, the banks richer, and lenders richer. We sure aren’t doing it to help the American People have the things they need. We’re doing it to pay welfare-a minimum life style with no way out-no college, no technical school-bad diet, poor or non-existent medical and dental care-creating an underclass which is unhealthy, knows there is no way out for them, without hope, and with high frustration against the “SOCIETY” or “The Man”-makes for an unhealthy society. Make work jobs-doing silly things like painting rocks-don’t add anything to the society or the person doing the silly jobs. Why not create things that the society needs?
1. Energy sources-CLEAN energy-Hydroelectric dams-that also provide recreational areas?
2. Transportation systems-not necessarily roads-how about high speed Mag-Lev (Magnetic Levitation) in the dividing areas between roadbeds in the interstates?
3. Public Buildings-Schools, Universities, Colleges, Trade schools?-or at least repair them?
4. Cleanups-clean up the rivers, streams, lakes and waterways?
Those are some ideas.
Another idea-really radical-and people will condemn out of hand-calling it “Communist”, “Socialist” and other assorted negative words-but think about it-before you condemn it.
The idea is to determine the total value of goods and services produced-Determine the value of money in circulation-NOT invested money, the money from salary, retirement, Social Security-and then the difference in “dollars” between value of goods and services, and the amount of income-and divide that amount by the number of people (or families) and then provide an amount to bring everyone to that minimal level. Where everyone can have adequate quantity and quality of food, a place to live, method to earn money, educate the children, and provide basic preventative health, dental, and vision care to everyone!
Isn’t it a shortage of money, in general, that keeps the people from having adequate quantity and quality of food?
Isn’t it a shortage of money, in general, that keeps the merchant from selling his goods? Isn’t it a shortage of money, to buy the goods produced, that keeps factories closed or working at low levels?
Isn’t it a shortage of money, in general, that prevents families from having adequate medical, dental, and vision care?
Finally, isn’t it a shortage of money, that has the government borrowing money from banks, lenders, and the wealthy? Thus creating our National Debt?
So why not print the stuff?-Sure, inflation for a period, until the system levels out. But will short term inflation hurt if it creates jobs, builds transportation systems, energy capacity, repairs and builds schools? If it takes us from being a society where there is chronic unemployment, a permanent underclass, a society that in large respect is badly nourished and frequently unhealthy-to a society with jobs, adequate food and shelter, and educational opportunities?
Just a thought-stolen from Robert A. Heinlein in a book called-surprisingly “FOR US, THE LIVING”