Wednesday, November 18, 2009


Except for military spending, that question is always asked.
Health care.... where will we get the money? will we pay for it?
Roads, bridges, environmental clean-up....where will the money come from?
Well, fellow commodities, the money will come from where it always comes from: LABOR! Even in all-out war such as World War 2 there was enough labor for both guns and butter albeit some shortages in non military goods. Otherwise there is not only enough labor, there is an excess! The other part of the equation is materials. As yet, as of now, at this moment the planet has enough stuff to take care of now and to have enough for a few decades and maybe even a millennium or two, IF it is handled wisely. Here is where we get political: corporate capitalism is not able to handle it wisely. EXAMPLE: There are 3 million more people in the U.S. every year needing more goods and services. In spite of this ever-increasing demand we have economic CONTRACTIONS periodically. More people need more things yet the economy CONTRACTS. Go figure.
Tom R Dooley

1 comment:

The Arthurian said...

"Go figure" -- ??

Periodic contractions are sign of a recurring imbalance of come sort... In my view the imbalance is within money (...note the relevance to your post title...), or the stuff we use for money (i.e. credit).

It irritates me, too, that "that question is always asked." But you and I disagree on some basic definitions:

Income comes from labor, from work, from producing what others are willing to pay for. But in this case money simply comes from other people. From circulation.

I think there is a difference between the question in your title ("Where will we get the money?") and the question in your post ("Where will the money come from?")

Money doesn't come from circulation. Money comes from the Federal Reserve, or the banking system, or fractional reserve banking... This is the way money is added to the system.

Anyhow, my view: The quantity of money in circulation (M1) has been reduced relative to output, over the long-term, since 1946. [Purpose? "To fight inflation."]

Meanwhile, the level of spending has been increased by every means possible. [Purpose? "To stimulate growth."]

These two economic policies conflict with each other [we do more spending with less money!] and the outcome is that people have come more and more to use credit for money. Because of policy.

Of course, when people use credit for money, debt accumulates... And when people use credit for money, the cost of interest becomes embedded all through the production process, embedded in prices throughout the economy. And so inflation results, even despite the highly restrictive monetary policy.

The imbalance is within money itself, the stuff we use for money: Not enough green, and too much red ink.

But I am distracted, because the dog must go out.