Tuesday, July 6, 2010


I've been thinking about our economy this weekend. There seems to be no cure for our problems. I believe there is a cure but first it will take a change in the mindset of Americans.

There was a time when we produced and sold more to each other than we purchased from other countries. We had natural resources to back up any money held in our hands. Of course, these days, the money is only as good as we believe it to be (consumer confidence). I also think of it as being only as good as our government, since the government is printing the notes (money) and standing good for its value.

I am not an economist in the college-educated sense. I have lived a pretty long time and have struggled with getting money to buy the things we need to survive. You know, housing, food, clothes, transportation, movie rentals, whoops, strike that last one, it is not really a necessity and we have probably not rented more than a dozen in our lifetime.

The problem is that the global economy is good only for those countries that do not produce their fair share of the needs of their country. Maybe it is not a kind statement but poor countries soak up the wealth of other countries like a sponge. Some countries are poor, not because of a lack of resources but because they can not stop fighting each other and their neighbors. There are countries that could do well on tourism, if it was safe to travel there.

Anyway, back to the U.S. economy. I don't know when we started borrowing from China so much. I do remember when our jobs started being exported to other countries where people had to work for next to nothing. We became a country of services. Someone decided that we would do the white collar work and let others do our grunt work. It has not worked out so well. We still have many people who had rather work with their hands and make things. Instead, their working hands must learn new trades which require a delicate touch or they must slip away into the sunset.

We are in a cycle with China. We borrow money from them to buy the things they make. It does not take a genius to figure out where most of the money ends up. The wholesale price of the goods goes back to the ones who made it with cuts from the 'middle-men'. The loans accrue interest which must be paid. There goes more money out of our country. The goods are made elsewhere, so there goes the wages which will be spent in a foreign country. There isn't much wealth staying between the oceans for us to work with.

I do not believe that an economy that produces no tangible product can survive. By tangible, I mean something you can touch. We have lots of services but you cannot eat, wear, or ride in services. Renting a car is a service but it is based on a tangible.

We must cut cost, produce products that our people can afford to buy and keep the money in our country. I'm all for teaching people how to fish so they can eat. I do not believe that one nation has enough fish to feed the world. Each nation must be taught to live on its own resources and balanced trade. One-sided trade will bleed one side dry while making another rich.

The government ought to take the lead but they will not. People will have to stop using credit like currency. "Living within ones means" is a good idea. The government gets their taxes even on credit purchases. If the debt goes bad, the government still has their cut. So, it seems good to the government to encourage credit spending. Indeed, I don't think they could get along with their current wasteful spending habits, without the 'buy on credit' tax money.

No, the government will not change. It is almost enough to turn one against education. Some of the most educated people in the world are running our country and they can do nothing but get us further into debt and let wars strip the economy. If you must buy something, pay for it. If you must go to war, win it and come home.

No comments:

Post a Comment