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Re: Understanding The Decline of the American Dollar and What it Means For You
| Posted On: 02/23/07 09:37:16 AM |
Age 60, MO |
Brannon, I have some additional thoughts about this topic, after reviewing a highly recommended simple economic text by Richard Maybury, called "Whatever Happened to Penny Candy." Good jobs are becoming more and more scarce for our offspring. Why? A job is primarily the "tools" necessary to produce what others want to buy. Where does the money for "tools" come from? Savings. Some people save money and put it in stocks, bonds, or bank CDs, where it can be made available for businesses to borrow this money to buy equipment and hire workers. Many times the money that would otherwise go to the private sector businesses is borrowed and spent by the government. In 1992 (the last figures I have), the average worker used about $71,000 worth of tools. But the government's spending was so much greater than its income, that it was borrowing $1.4 million every two minutes. This soaked up the money that should have been going to buy tools to create jobs. If you divide $1.4 million by $71,000, you see that the governments deficit spending was consuming 20 jobs every two minutes, or wiping out approximately 262,800 jobs every year. The condition has only worsened in the years following 1992. This is damage from the deficit only. It is hard to determine how much savings is eaten directly by taxes. The government is so large and powerful today, that is likely that it is consuming more than a million jobs every year. Former US Treasury Secretary William Simon called this the "Great American seed corn banquet." When a farmer harvests a crop he saves a portion as seed to plant for next year's crop. If this seed is eaten...!?! We affluent members of the over the hill generation won't be hurt too badly, but the young are absolutely dependent on a steady supply of new jobs, and our huge, voracious government is eating up these jobs. George Cancilla
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Re: Understanding The Decline of the American Dollar and What it Means For You
| Posted On: 02/22/07 03:27:41 PM |
Age 60, MO |
I thought the interview was a very good basic look at economics in the USA today. One thing that I would clarify: Inflation: too much money chasing too few goods. I would alter that a bit to read: Inflation is simply an increase in the amount of money. This phenomena occurs when the government prints or produces more money. Such increases cannot be at the mere whim of the government. An increase must be calculated on many economic factors. The effect of producing more money is as you say, however. But our problems of economics are deeper than what we may think. The government is cheating and stealing from the people through this system of making money. The government skimms the cream of the dollars off the top before the devaluation of circulation occurs. The idea of "deficit spending" is as dishonest as you will get. The people figured that since the government could do it, they could do it too. Total debt in this country is $65 trillion: that includes federal, state, and local government debt, all consumer credit debt, home mortgages, car payments, etc. The government needs to cease and desist with any more debt. And the rest of the population needs to follow suit.
George Cancilla
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