The Simple Common Sense of Economics
by L. J. Martin
What’s wrong with the Obama approach to economic recovery?
What’s the value of money?
When you print money with no backing, it drives down the value of money and all those with savings and a fixed income, i.e. Social Security, pensions, and fixed dividend income, suffer from a loss of purchasing power as inflation is the inevitable result.
When you print money to pay for bad investments no benefit is gained, no products result; and government has made bad investment after bad investment, and thinks they can merely print money to cover those bad investments…and they can, and have, after all they have the paper, ink, and printing presses, at a cost to all who’ve worked hard and valued thrift. For printing money results in inflation, a proven, and inflation robs from those who’ve saved or invested for a fixed annual return. It not only robs their purchasing power, but robs their faith in their government and yes, in their very system of government.
When you have gordo government agencies, overblown with employees with nothing to do other than create restrictive regulations on business—they must do something to justify their existence—that’s a bad investment. When you try and buy friends with foreign aid, that’s a bad investment. When you give money to farmers to not produce, that’s a bad investment. When you pay people to stay home and not work, or to have more children they can’t feed, or to borrow money from the Fed for school loans with the understanding they won’t have to pay them back, that’s a bad investment. And the list of bad investments by the Fed, the states, and the cities and counties is almost endless. Take the decision by the Department of Transportation that all street signs in capitals must be in both upper and lower case at a cost of hundreds of millions of dollars to states, counties, and cities as an example of the overblown agency at work? When the actions of government agencies become laughable, is that an example they might just be overblown, too large, ineffective, and yes, worthless? Bad investments in and by government have destroyed the value of money. Bad investments in and by government have destroyed the concept of hard work and thrift.
When you drive down interest rates, i.e. mortgage rates, it falls to the whole system to lower the rate of return on savings and all other investments. When the rate of return is lowered, the value of money is reduced. You put money in savings and get a very small return…the value of money is almost nil. The concept of hard work and thrift is destroyed along with the return on savings and investment.
It’s only the most common of common sense that capital (money) moves to where it’s least punished. And a return on savings of less than one percent is punishment to those who’ve worked hard to save or who wish to invest. Consequently money doesn’t go into savings, and savings are where investment, i.e. loans to business, originate.
When money, savings, becomes worth something again, the whole system will benefit and money will be put back to work by investors and corporations who now have little if any incentive to do so.
The Federal government, the current administration in particular, has destroyed the value of money and the concept of thrift. Why save when you can get no return on your savings?
It’s time to change the basics of our system to value thrift and hard work again: to value the repayment of debt, to value investment in both savings and productivity. it’s time to return to the basics of economics.
When the value of money is almost nothing, it destroys work ethic and thrift, the very basis of our free enterprise system. A system that’s provided the most prosperous country on earth. A system with it’s economics based on free enterprise.
You can’t lose faith in your money, and who can trust money with little or no value without losing faith in your form of government. Perhaps that’s the intent of the current administration?
I think that sums it up.
Economics 1A From The Pea Patch
L. J. Martin is the author of 30 published works of both fiction and non-fiction and h articles are published in dozens of national publications. He writes a conservative blog: http://fromthepeapatch.com. His videos can be found at ljmartinwolfpack on youtube.com. He’s married to an NYT bestselling internationally published author and they live in Montana. For more see www.ljmartin.com.
- FROM THE PEA PATCH (Economics for imbeciles…like me)
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