22 April 2009
Written by
joe hx (
)
Published on April 22nd, 2009 @ 10:50:38 pm, using 332 words, 26 views
In this era of massive government spending, a huge government deficit, untold amounts of consumer debt, and stories of layoffs after layoffs, some have come to wonder how those who have money achieved their wealth. Those some have come to the conclusion that the evil rich through trickery and deceit.
I have evidence this thought exists. In the Fall of 2008, my university sociology teacher explained to us that the rich came across their wealth by stealing it from the poor and middle class. Why? Because they’re rich. Circular reasoning, for those who don’t know.
So let’s humor my teacher and the masses for a moment. Let’s say that all rich people are evil. Who is rich? Well certainly CEOs and their conglomerate companies. Politicians, too, who often have more money than they’ll ever make serving public office (I’ve often wondered why we even pay them then - shouldn’t serving public office be noble enough? But I digress). Yes, this includes President Obama.
So it seems we need to reclaim this money - at least according to my teacher. Who’s to do this? The government - run by evil rich politicians - of course! So this leaves me with two questions:
1. Why would we trust one group of evil rich people (politicians) to take money from another group of politicians? Wouldn’t the first group just keep it for themselves?
2. If the evil rich became rich from stealing from the poor and middle class, wouldn’t they just take the money from the poor to pay these extra taxes? If so, then raising taxes on the rich is actually raising taxes on the middle class and the poor!
Of course, I don’t believe that rich people are inherently evil. I think that rich people do need to spread the wealth - through jobs - than for the government to take it and hand it out - where some of the money will be spent of the logistics of handing it out.
I don’t know. Just think about it.
Until next time,
Joe
07 March 2009
Written by
joe hx (
)
Published on March 7th, 2009 @ 02:15:38 am, using 231 words, 22 views
If you read my previous blog on the economy, you’ll see how I explain recessions as part of the inherent flaw of capitalism. As a recap, it is essentially because business people need to earn more than their customers, and their customers need to make more than the business people. This concept would make one wonder how capitalism works at all.
And one reason it works is because of debt. Debt allows us access to money we have yet to earn. We borrow from the future. Debt is a stabilizing factor in that customers and businesses can spend more.
The major problem with debt is the tendency to spend more money than you will have in the future. Once you cannot pay off your debt, the walls of capitalism begin to fall down. Once businesses and customers begin the bankruptcy process, debt is forgiven, and the businesses and customers can spend their future money again. This builds up and becomes once again a booming economy.
Yes, it will fall down again. There will be hard times ahead again. Surviving the next recession should begin with the next boom. Put money aside, even if you have debt. Pay off debts that have high monthly payments. Although credit cards often have higher interest rates, they allow you to borrow from a much further future.
And I am tired.
So.
Until next time
Joe
25 February 2009
Written by
joe hx (
)
Published on February 25th, 2009 @ 01:12:06 am, using 276 words, 38 views
The sky is falling. Everyone’s losing their job. The dollar isn’t worth what it used to be. Everything’s doom and gloom. Yet economists and politicians seem to insist that this is all part of a cycle, which includes recessions, booms, depressions, bull markets, bear markets, and other mumbo jumbo.
So why does the economy collapse every now and then? What makes it rise and fall? Why can’t we just have a booming economy forever? It all has to do with the inherent flaw in capitalism. Consider the following picture:
Assume there are two groups of people: business people, depicted by the Monopoly guy on the left, and customers, depicted by the Monopoly guy on the right. These people play multiple roles, too: business people are also employers, and customers are also employees.
In order to make a profit, a business person has to make more money than his expenses. One of his expenses is employees, so that means he needs to make more money than he pays his employees.
In order for employees/customers to save money, they have spend less than they earn.
Thus a business person has to make more money than he pays employees, and employees have to earn more than they spend. Since employees are customers, the money they spend is the revenue for the business person. So for an economy to be stable, business people and employees must make more money than one another, and the economy collapses.
Almost done for today. Economies are much more complex than a single business person and employee, so the relationships are not as apparent. Other things factor in as well.
Until next time
Joe
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