Fairy Tale Dollars

Once upon a time, the dollar in your pocket had positive value. Money is now only a number in a database. Even the money in your bank account is a fictitious number. Roughly, only 10% of the people could cash in their accounts, bonds, pensions or securities in any given month or even year. That is why the US banks crashed a few years back and required bailouts in order to keep pension funds and savings afloat. Too many mortgages based on fictitious values went sour.

Could it happen again? Yes! The only thing different is the shift in responsibility. Now everyone owes, instead of only the richest who had the most dollar amount to lose.

Will it happen again? Yes! The debt didn’t go away, it is still there – accumulating interest, on a graduated scale. The more the debt, the higher the interest. The deeper in debt, the greater risk of collapse.

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Election Politics

What would happen to an election candidate that said, “Everyone needs to pay more taxes. The rich and the middle class incomes need to lower their standards of living. We need to enforce the highest standards of environmental controls.”?

That’s right, they wouldn’t get elected.

It is not the politicians fault. It is the fault of the electorate. Almost everyone wants someone else to shoulder the burden. It matters not at this point how a nation got themselves into the fiscal morass they are in, what matters is how to get out of overburdening debt. Tax more, spend less; that’s it.

Unless national pride takes over and the peoples make a spending shift to buying mainly products manufactured in their own country, the economic base is not going to expand favorably. Industry will not come back. It just ain’t gonna happen. People would much rather buy cheaper imports than products made by workers paid at their own income standard.

Dollar Cycle

There is an old saying, Money is made round to go round. That is no longer the adage. A dollar spent at a locally owned and operated business using local services and selling local products where possible, will cycle in the community approximately seven times, buying more locally produced products and services, paying local wages, paying local taxes, paying for community services. Everyone in the community benefits and more community services can operate effectively and efficiently within budget. There is less unemployment and better paid employment.

Alas, in reality, people tend to spend their dollars at national or even international outlets where, the prices are less but, where the over half the dollar is skimmed off the top leaving the dollar to cycle only, on average, 3 times in the community. Generally the wages are lower, meaning less taxes are paid. The goods and services they offer are mostly imported, jobs and profits leave the country. The footage per retail is condensed leaving less local taxes collected by the community. Whenever a retail giant moves in to a community they will brag about how many people they will employ. In reality, the overall employment level drops as they force local merchants out of business. Local taxes have to increase to compensate for the losses.

Multinational and international retail giants are a lose, lose, lose reality. A loss for the community, a loss for the country and a loss for the tax payer.