Monday, October 13, 2014

Chapter 8: Our Current Money Problem

There are a few problems with the current state of the economy that could easily be mended if a few regulations were put into place.  The two main factors contributing to most economic problems are:  a) money leaking out of the country and b) the ability to freely use the dollar - allowing "sponges" to acquire infinite wealth.

Formal Derivation:

8.0 - The current economic problems in the United States are occurring due to two factors.  There is/are:  1) a leak, 2) allowing money to be used too freely, allowing "sponges" to capitalize off the people working for them (not withholding them from acquiring as much wealth as they want).

8.1 - (A diagram of the economy of the United States)

Not depicted (due to complexity):
   8.1.1.  There are more than 2 people.
   8.1.2.  There are more businesses than those depicted.
   8.1.3.  Not all people make the same amount of money.
   8.1.4.  There are persons the government pays to contribute in providing public services, and the money they make goes to businesses.
   8.1.5.  People are taxed.
   8.1.6.  There is some foreign money that is received in exchange for domestic products.
   8.1.7.  Often times, the persons employed by big businesses reside in a foreign country, meaning their dollar earned is going to foreign businesses, not the businesses depicted.
   8.1.8.  Many businesses are owned by groups of people.

8.2 - There is a leak, and it is destined to hurt the economy.  We must regulate money transactions between countries.
   8.2.1.  Draw attention to the yellow line in 8.1.
   8.2.2.  Suppose more money continually leaves a country than comes in.
   8.2.3.  Then the money we use to account for needs within the country becomes property of foreign countries.
   8.2.4.  People and businesses (in this model) need money.
   8.2.5.  More money needs to be made (since it is no longer in the country), and the money other countries possess needs to be accounted for.
   8.2.6.  Thus we have inflation (due to money made) and a weak dollar (since the money other countries have has to be accounted for).
   8.2.7.  There should only be equal trade between countries, and this can be done by trading without money or (for more complicated trades) trading money for money that is to be used promptly.

8.3 - There are too many large amounts of money possessed by citizens.  Money should be displaced by the government to account for deficits, or consolidated together by the government in order to draw from a common account.
8.3.1.  There are "sponges" in society that soak up amounts of money beyond what would be considered (even by them) as "more than enough."  
8.3.2.  There is money that is not in use that we must account for.
8.3.3.  We could make money - which would weaken the dollar, we could displace the money (tax higher) from those that have more than enough, or we could consolidate our profits to pay for all deficits.   


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