28 January 2008

The effects of cushioning

These thoughts are made as an observation or theory about human behavior. The Fed's role in regulating the money supply in order to cushion us from the natural bumps of the business cycle makes people less aware of the value of being prepared for economic downturn by saving, having food storage, and having personal food production capabilities (a small garden that could be expanded as needed). While removing the Fed wouldn't necessarily correct the problem, it would cause more people to become more secure and to avoid debt more carefully. But, people will generally favor material possessions now over financial security and preparedness.

The Federal Reserve and Government on Money

The Federal Reserve acts to cushion the business cycle by reigning in economic activity in times of boom through contractionary monetary policy and to boost it in times of downturn through expansionary monetary policy.

Furthermore, the government is currently planning a transfer of funds back to the American people. Taking a look at the money flow, most taxes are payed by the wealthiest Americans, (from the highest tax payers) whereas the "tax rebate" is being given exclusively to taxpayers making under $75,000/yr to act as a stimulus to the economy.

12 January 2008

What would Franklin say about universal health care?

At the root of our motive to work is a desire to survive and to feel secure. Universal health care will be a demotivator to work and an incentive to plan poorly for the future. When the government redistributes wealth, it gives society a false sense of security and lulls people away into a state of carelessness and non-productivity. Such programs rob the industrious and give undeserved, (and perhaps more importantly) unsustainable rewards to those who have not labored for them. There is a way to help the poor and unfortunate. That is through charity and free-will giving. Free-will interactions of that form elevate both the giver and the recipient. Governmental redistribution of wealth is too easily taken for granted by the recipient and yielded begrudgingly by the taxed. Neither group is lifted and both are given incentives to work less (the taxed because he is deprived of his reward and the recipient because he receives without work).