Posted tagged ‘Public sector’

We Are Reaching The Tipping Point.

February 20, 2013
Teeter Totter

Teeter Totter (Photo credit: lambdachialpha)

Consumption is starting to over take production as these charts show. Government spending is an exchange of confiscated, borrowed, or counterfeited dollars for a good or service that has been produced. These dollars represent certificates of purchase that can be exchanged for anything produced in the market. Legal tender laws decree that these dollars have to be accepted for all debts, public or private. The Fed has a legal monopoly on money production, and the fact that the Fed has counterfeited 3 trillion plus dollars since 2008 means that they have stolen 3 trillion dollars worth of goods and services from the private sector over the last four years. (more…)

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Why Do People Think The Government Is The Economy?

February 17, 2013
leech

leech (Photo credit: KCBIO)

PRODUCTION AND EXCHANGE

Government can only exist if it is funded. In the market, people produce a good or service, and exchange it for a good or service that someone else has produced. You might think that through this exchange process each of us funds each other, but that would be incorrect. Each person funds himself from what he produces. If I don’t produce anything, not only would I have nothing to use for exchange, I would have nothing to consume. If I decide not to produce, I would have to depend on other people’s generosity, or I would have to steal someone’s production (more…)

Capital Consumption, aka, Eating Our Seed Corn.

January 30, 2013
Corn Seeds

Corn Seeds (Photo credit: Stevie Rocco)

This article on ZeroHedge.com, R.I.P. Retirement: 28% Of Americans Are Raiding Their 401k Plans, talks about how people are withdrawing a portion of their retirement savings and spending it on present consumption. A large part of these savings will be used  to produce capital goods (tools, buildings, vehicles, machines, etc.), which will be used to produce future goods more efficiently. When we start to use money saved for capital formation and use it for present consumption, we are eating our seed corn. If we start to eat a portion of the corn we’ve set aside for use as seed, we won’t produce as much corn for next years consumption. This has been happening for the last four years. Individuals have been using savings earmarked for the future, in order survive in the present.

CAPITAL FORMATION

The money an individual gets paid for the good or service he produces (more…)