Wednesday, June 3, 2009

Lessons from My Father

My first economics lesson took place when I was about 10. I remember talking to my Dad about why everyone didn't have the same amount of money. I innocently asked why the government didn't just print enough money for everyone to be rich. 

I don't remember exactly what my Dad said, but I knew that it would be bad for the economy and that it would take away people's incentive to work hard and that would take away the good feelings of accomplishment we can get from working hard. I knew that it wouldn't work. The Econ section of my college American Heritage class also taught that printing money would not help an economy. 

So why is the US trying to fix our ailing economy by printing money? Oh I know, some people will say that is not what they are really doing. But it is what they are doing. And it is not going to work. Money will be spread around. Some people will be better off for a season. Obama will get votes from people he spread the money to. And instead of my innocent dream of everyone being rich - everyone will be poorer. Except for a few.  Thanks for the lesson Dad. I wish others had wise dads to listen to. And I wish more who do have wise dads would listen to them.

2 comments:

Ben said...

Your Dad's lesson is so true - I wish we could all live and work hard like that. But without the ability to truly live the Law of Consecration, people (politicians, really) are left to figure out ways to keep an already widening recession from becoming a far-reaching depression. By printing more money, the economy avoids "deflation," which is much worse than the effects of "inflation" - which is what inevitably occurs when more money is artificially created. Deflation decreases consumer spending drastically and increases the burden of debt. When the government can't sell bonds to raise capital, it resorts to the money tree. It's not a good answer at all, but it seems to create less of a gash in the overall economy than by allowing deflation to occur. I'm no Democrat - don't get me wrong - and I'm not about taking free government handouts, but committing an act of omission in this case would be much worse than the act of comission being performed now.

ohiolanges said...

Ben,

It is not a crime to be a democrat. : )
This will be interesting to watch. But I think that there is some pain that should have been felt and dealt with 6 months ago. The stimulus money was placed with the promise that the problems would solved. Yet the problems still exist. And the money is gone.

2 months ago we were told that the police force in Columbus was saved, thanks to stimulus money. But now we are told that unless a tax increase is passed 300 police officers and other emergency services will be at risk.

So where did the stimulus money go? Same with the auto companies. More money than I can comprehend was pumped into those union -run companies with the promise that it would be enough to save them. But now they are filing for bankruptcy.

If your child was in his seventh year of college with no degree in sight would you keep paying his expenses? Or would you evaluate the progress and decide it was time to cut him off and let him figure out how to survive on his own.

I know the economy is a complex beast. And I don't claim to understand all of its intricacies. But throwing this amount of money at these problems without a plan is not the answer.