Column 478      October 25, 2024Thomas Jefferson’s Brick Shithouse

Nothing guarantees boredom for the witless masses more than an economics discussion. But unless you understand basic economics you’re just a witless cog in the system. Unfortunately, most Americans are witless about way too many aspects of what it takes to have and preserve a good life. Americans know everything about games, the latest fast food craze, the latest tattoos, the best TV shows, and the game of the week. But when it comes to history, social studies, economics, and politics, they are really an embarrassment.

From Wikipedia: “Economics is a social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behavior and interactions of economic agents and how economies work. Microeconomics analyses what is viewed as basic elements within economies, including individual agents and markets, their interactions, and the outcomes of interactions.”

If you think about it, understanding the “outcomes of interactions” from “the production, distribution, and consumption of goods and services” is CRITICAL TO YOUR FUTURE. And our many layers of government have a huge impact on outcomes which impact your entire life.

So, maybe understanding some of the basic fundamentals of economics aren’t so ridiculous after all. During the presidential campaign all kinds of politicians and analysts have been spewing their takes on the economy. Most of their analyses and suggestions are in left field—if they’re even in the ballpark. When it comes to discussing economic policies, Kamala and Walz are perfect examples of totally witless people. They are absolutely clueless!

I had numerous courses in economics sixty-plus years ago. In the years since I’ve watched our country slowly self-destruct. The self-destructing started before that! But there have been several times when change would have resulted in a far more powerful country today. Sure there has been a lot of advancements over the decades, but our progress has been built like a house of cards rather than the “brick shithouse” our Founding Fathers demanded. (Take note of the image of Thomas Jefferson’s Brick Shithouse.)

Just a few instances of basic economic truths are examples of where today’s popular claims by politicians and analysts aren’t connected to reality.
●    Inflation occurs when the quantity of money is increasing faster than the supply of goods and services. Deflation occurs when the quantity of money decreases faster than the supply of goods and services. It’s the banking system and/or the government that lends or prints the money which causes inflation. It’s an unwinding of credit or rapid expansion of goods that causes deflation.
●    Inflation is not caused by businesses raising their prices. Therefore, forcing businesses to lower their prices will not stop the inflating process. Instead it will create shortages of goods!
●    A country that puts Tarriffs on imports will not cause price inflation when the goods are eventually produced domestically. The domestically produced goods may cost more to produce, but with a constant money supply other goods in the marketplace will fall in price.
●    Taxing businesses creates an operating cost that’s passed onto consumers.
●    Subsidizing businesses or activities will not level the playing field. It creates imbalances that the marketplace must correct overtime.
●    Federal government debt is not an asset. It’s a liability of all the citizens.
●    There’s two kinds of debt. One is debt for consumption which borrows from the future and it can be inflationary. The other is debt for financing inventories which is not inflationary.

Our country has persistently spent more than it has taken in since 1933. Prior to that it was on a gold standard that tied the hands of politicians who wanted to print and spend. But when the politicians removed the dollar’s tie with gold and printed more dollars anytime they needed some extra cash, they devalued the dollar to the point where it’s nearly totally worthless compared to 1933. In so doing they have created an imbalance in the economy where there are the super rich who own nearly everything and the poor people who can’t even afford housing. Plus the accumulated debt is bankrupting the country.

The accumulated national debt and obligations now totally exceed the capabilities of the economy to service. Essentially, our country is bankrupt! And the people must pay the piper as the government either addresses its wayward ways, or just keeps printing until the system collapses to dust and Americans become impoverished.

If you live in America there’s two choices. Vote for politicians who will change directions or live in a country that will suffer the consequences that have befallen all other countries that our politicians have emulated. My suggestion is that becoming more familiar with history, social studies, economics, and politics is not such as bad idea.

Another unfortunate aspect of leadership that doesn’t respect economics is that the people end up with the same bankrupting principles. Many Americans live paycheck to paycheck with no savings yet plenty of debts. I’ve watched in horror as youngsters set up house with ridiculously wasteful ways. They spend money on simple pleasures that if postponed they would never miss. They don’t budget. They eat out rather than sack lunch or eat at home. They assume obligations for new rather than make do with old. They never set aside money for growth of income or principle! In the process they remain broke.1

In order to start my first business I had to save money. The sacrifices in living standards that my wife (who attended college) and I made to pull it off would have shocked most of today’s young Americans. We wasted nothing. Everything we had was old, used, cheap, or hand-me-down. We had virtually no obligations other than the basics. And even with very low income we saved and invested money every month, month in and month out.

Today’s youth buy a coke (very expensive water), take a few sips, then throw it away. They buy takeout food almost daily and throw half of it away. They spend money on tattoos and jewelry they absolutely don’t need. They have pets that cost money. They spend ridiculous amounts on vehicles because the initial payments are low. Then they drive like a house on fire always braking or pushing pedal to the metal—never coasting. They have the best phones. They pay for television when it can be had for free. The list of wasteful spending is atrocious.2

It’s time for change because, for most citizens and the nation, the current path isn’t sustainable.

To your health.

Ted Slanker

Ted Slanker has been reporting on the fundamentals of nutritional research in publications, television and radio appearances, and at conferences since 1999. He condenses complex studies into the basics required for health and well-being. His eBook, The Real Diet of Man, is available online.

For additional reading:

1. 28 Proven Ways to Save Money from Nerdwallet

2. 31 Creative Ways To Save Money by Cassidy Horton from Forbes Advisory