Governance versus Politics

Posted by JaxGary 9 years, 3 months ago to Government
68 comments | Share | Best of... | Flag

Now that the 2014 mid-term election cycle is behind us we see the early stages of the 2016 presidential election, we should consider the desired role of government. Do we want a government that protects the people or one that rules over them? Do we want governance or politics as usual?

Governance is simply fulfilling the responsibilities assigned to their office; and restricting ALL of their official activities to doing only those things. Our founders thought the only proper role of government is to protect the people and the property owned by them. Government exists to do only those things for the people that the people cannot do for themselves. Governance is the essence of preserving individual liberty and freedoms.

Politics, on the other hand, is a system of coercion that concentrates power in a few individuals so they may exert that power over others to achieve whatever personal goals those rulers have established for themselves. Politics is most effective in state and national government as the body of elected officials have the legal authority to lay and collect taxes and then use those revenues to reward their friends and punish their enemies. Politics is antithetical to individual freedom!

There are really only two choices; a government that protects the people or a government that abuses the people.

The American people need to recognize politics for what it is – an abusive power grab by elected and appointed elites who believe only they are smart enough to make decisions for the average person. The reality is that no government system or form can endure unless the majority of the people support it. Why do so many Americans today support a corrupt system that takes from some and gives to others while burdening all?

Our economy in in total shambles compared to where it was shortly after the industrial revolution when we produced more than half of the manufactured goods in the world. The dollar has lost almost all of its value in the last hundred years. According to the Bureau of Labor Statistics, CPI inflation calculator, it would take $23.62 today to purchase what could have been purchased in 1913 for $1.00; an inflation rate of 2,362%! Another way of looking it is that only 3 cents would have bought in 1913 what $1.00 will buy today. A penny had real value at that time.

Politics has created government growth resulting in an out-of-control behemoth that currently has an insatiable appetite for taxing and spending. Today Congress, as an institution, is only respected by a single-digit percentage of Americans who think they are doing a good job of governing.

My question is why any American thinks Congress is governing!


Add Comment

FORMATTING HELP

All Comments Hide marked as read Mark all as read

  • Posted by $ AJAshinoff 9 years, 3 months ago
    The reason why Americans believe Congress is governing is because we've been conditioned. We have, for far too long, been given two unpalatable choices for the symbol of American leadership, the US President. Now that office has been blatantly soiled by refuse and the only hope to correct matters has to come from Congress. SCOTUS has failed us too many times and there simply is no promise coming out of the globalist RNC and leftist dnc party-poster children to think conviction in any one person will stand again the tidal wave of DC immorality, infidelity and corruption.The hope, unfortunately, relies in, frighteningly, the collective consciousness of congress coming to the proper conclusions to thwart the ever increasing slide into history's cesspit while Useful idiOts cheer.
    Reply | Mark as read | Best of... | Permalink  
  • Posted by DeanStriker 9 years, 2 months ago
    "Politics is antithetical to individual freedom!"

    Strike "politics", replacing that with GOVERNment. Politics is merely the natural and inevitable part of that equation.

    Surely you realize that GOVERNments are always granted powers of Force. As the People have no role in the so-called Balance of Powers, it always results in Tyranny and eventually governments always fail. Ditto all the empires and kingdoms and land barons before them. Always they fail, yet always they are replaced in kind..

    Everyone is supposedly born with the Right to Life, which necessarily includes other rights to sustain and enhance that life. That can mean only that Individual Sovereignty must prevail. As it stands today and always before, Governments are "permitted" to deny that Sovereignty, and the Billions of Sheeple on this planet accept it without question. It's Catch22 in action.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 9 years, 2 months ago
      I believe you are addressing my essay. I am not a fan of government per se, by I see a need for governess. For example, I have the right to defend myself. I would have little chance of success if I were to be attacked by 10 aggressive individuals at the same time. The concept of governess existing to protect the rights and property of the citizens by doing what individual citizens cannot so for themselves is appropriate. We have community police to protect us and community fire protection to protect our property. Libertarians would do away with government police and fire and replace them with insurance cooperatives that had identical authority. Either of those methods would imply governess and I am all for it. It is the non-essential elements of government that I rally against.
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by DeanStriker 9 years, 2 months ago
        @JaxGary - yes I was addressing your essay, while supposing that hitting Reply was programmed to include the name of the addressee. Still learning the ropes here LOL.

        To govern means to control. Early tractor engines had a "governor" to control and limit the maximum RPM. That device on our old Allis Chalmer tractor was troublesome and could interfere with starting. Seems that system today is either gone or controlled by electronics.

        We can surmise control has always been the charge of governments, thus they are handed the powers of Force over the very "citizens" they supposedly "protect". IOW by accepting being governed we humans concede our sovereignty to... other humans! Paradoxical, huh?
        So Power corrupts until once again the Government must be overthrown, only to be replaced by yet another government. Go figger!

        Sans government, there can be no more edicts by Rulers, so humans organize (Voluntary) entities such as cooperatives, corporations, associations, whatever, to accomplish desired objectives for themselves. Alway6s such entities have freedom of entry and exist, thus very different from governments from which there is virtually no voice and never an escape hatch!
        Reply | Mark as read | Parent | Best of... | Permalink  
  • Posted by Herb7734 9 years, 2 months ago
    We have become a lazy, self-indulgent country that would rather let the government do it, than recognize freedom means that We must do it for ourselves.. To the degree that we turn our responsibilities over Big Brother, to that degree, we have lost your freedom. The most important question for Americans today is whether we can backtrack away from the Nanny State and put the responsibility of people's lives back into our own hands, and if that can be done, will the people who are so used to being taken care of, respond positively, or remain dependent until they are pawns of the state.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 9 years, 2 months ago
      I would rather have than as pawns of the state than pawns of the central government. The government that governs best is the government that is closer to the people it represents because people are willing to hold local government more responsible than the far away DC crowd. All duplicity should be immediately eliminated; if the states have a program, the federal program should be abolished. I won't even sympathize for those hundreds of thousands of unemployed former federal workers.
      Reply | Mark as read | Parent | Best of... | Permalink  
  • Posted by DennisKebrdle 9 years, 2 months ago
    Nice note--on point, we elect representatives (supposed to!!) of our views, not "leader" or "bosses". the king died in 1783! we can fix this mess--term limits--no life long pension or health care for elected persons--it is a privledge not a life long position of aristocracy! add in the multiple pensions being captured? why would we pay more than one pension to any government worker? non-elected only as noted! there shouldn't be a pension per job--esp as there is still the belief that 20 and out due to crappy pay has gone by the way side. we've given them the keys to the cashbox. let's change the game.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 9 years, 2 months ago
      Why do we pay a pension to any government worker OTHER THAN the US military and others who directly put their lives at risk in fulfilling their duties. I cannot equate a military retiree with a retired grounds keeper in a federal park. The entire entitlement mentality seems to defy logic. Risk should be linked to return. Civil servants have very little risk and usually have better retirements the military retirees. As a military retiree, I am profoundly grateful for the healthcare benefits. Thanks to all of you for making sure my wife and I are so well taken care of in that regard.
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by Rocky_Road 9 years, 2 months ago
        The justification for government employee pensions used to be that they were being paid less than their equals in the private sector...but that is no longer the truth.
        Reply | Mark as read | Parent | Best of... | Permalink  
        • Posted by Rocky_Road 9 years, 2 months ago
          "A December 2014 Cato Institute report on federal and private sector worker pay finds, “In 2013 federal civilian workers had an average wage of $81,076, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation’s 107 million private-sector workers was $55,424.”

          When benefits like health care and pensions are included, "federal worker compensation averaged $115,524, or 74 percent more than the private-sector average of $66,357."

          http://cnsnews.com/news/article/eric-sch...
          Reply | Mark as read | Parent | Best of... | Permalink  
          • Posted by 9 years, 2 months ago
            That is why I will have no sympathy for federal workers when their jobs disappear due to an economic collapse or a highly improbable "rampant infection" of economic sense in DC.
            The fairly tale of the Golden Goose comes to mind.
            Riddle: How many private sector workers are required to support ONE public sector worker?
            Answer: None; the public sector workers are being paid with "magic money" that is created as needed in Washington, DC.
            Reply | Mark as read | Parent | Best of... | Permalink  
  • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
  • Posted by Robbie53024 9 years, 2 months ago in reply to this comment.
    I'm not talking about the growth of the investment, but the issue with the growth of value in a currency that would cause the scenario I presented using Berkshire as an example of growth without dilution via stock splits.
    Reply | Mark as read | Best of... | Permalink  
  • Posted by TahoeDagney 9 years, 2 months ago
    If “Government exists to do only those things for the people that the people cannot do for themselves.”, then that which you call “government” & which is more properly called “The State” is not needed at all, since there is NOTHING that “the people cannot do for themselves” far better than can the coercive theft-based State.

    You’re quite correct ‘bout politics. It’s pure force. There are only four issues involved in any political question:
    1—Who gets to hold the State gun (who will be the State “leaders” -- decided in “elections” or by bureaucratic appointment)
    2—At whom will the gun be pointed (who will be the victims of State confiscation of property, health, life, freedom -- decided by the House & Senate … & lately, by the President)
    3—How much property will be stolen from the victims (decided by House & Senate)
    4—Who will benefit from the theft (decided by House & Senate)
    RE: “My question is why any American thinks Congress is governing!” … ‘cause we’ve all been indoctrinated for generations by State-controlled schools and media. We do not need those either.
    -------------------------------
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 9 years, 2 months ago
      That is an interesting way of expressing the truth, Thanks for posting those issues with such great clarity. I had never thought about politics like that in the past; but I will never think about politics in the future without remembering them.
      Reply | Mark as read | Parent | Best of... | Permalink  
  • Posted by $ allosaur 9 years, 2 months ago
    I recall Ronald Reagan back around 1980 saying that government "is the problem."
    Folks back then recognized that Reagan referred to three three branches of government and the vast bureaucracy that went with it.
    Of course, "We The People" started out to be and allegedly still is the government.
    Now to date among "We The People" we must factor in all the low information voters, the moochers, and the socialists who play the former two groups as a percentage of "We The People."
    A huge percentage. A growing percentage.
    Looks like my reasoning just went full circle, y'all.
    The government still is the problem..
    Reply | Mark as read | Best of... | Permalink  
    • Posted by 9 years, 2 months ago
      I can't quite wrap my mind around your concept of the people being the government. The government, at least in the USA, was created by the people and some of the rights of the people had to be ceded to the government to allow the government to have authority. However, the people remained sovereign, in that the government was not as powerful as the people. Somewhere along the way, the roles have become revered as our central government seems to behave as if they are the sovereign and we the people are their underlings. It is precisely that bloating of the government from the protector of individual rights to the exploiter of individual rights that is the problem. Our Founders were well aware of that potential risk and cautioned that this republic was only fit for honest and just people; the looters and moochers have found a way to corrupt our republic into a de facto democracy and the history of the world has shown that democracies all die the same death. When voters realize they can vote transfer of wealth schemes into existence, they quit working and the downward death spiral begins.
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by $ allosaur 9 years, 2 months ago
        Your last sentence is my argument.
        Maybe I'm being too abstract and can't wrap my head around that.
        That's OK.
        Jimmy Carter would call us both racists for not thinking like the emperor.
        Reply | Mark as read | Parent | Best of... | Permalink  
  • Posted by Im_J-hnG-lt 9 years, 2 months ago
    Government at it's best is a useful servant and at it's worst a terrible monster.
    Like a parent unable to appropriately address the needs of their children, turn on them, using coercion and physical force which escalates to violence and disassociation.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by DeanStriker 9 years, 2 months ago
      "Government at it's best is a useful servant and at it's worst a terrible monster."

      Hey, it's always that way. People sluff off everything and allow themselves to be Ruled. It's so easy to figure out!
      Reply | Mark as read | Parent | Best of... | Permalink  
  • Posted by CircuitGuy 9 years, 3 months ago
    I agree with all of that except the part about monetary policy. It's actually an inflation rate of 3%, which you can verify by taking 1.03^(2015-1913). This is the target rate of inflation. They've stayed close to it all my adult life. It's easy to account for when comparing historical prices and easy to update prices in Quickbooks, so I don't see why anyone gives it a second thought.

    Regarding the part about Congress's approval, most people disapprove of Congress but like their Congressman. Maybe someone can crack the issue of getting people to hold their own congressmen accountable.
    Reply | Mark as read | Best of... | Permalink  
    • Posted by $ CBJ 9 years, 2 months ago
      It's an inflation rate of 3% only if one relies on the government's figures. The Consumer Price Index has been heavily massaged during the past few decades to make price inflation appear lower than it really is.

      http://www.shadowstats.com/
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by 9 years, 2 months ago
        I believe CircuitGuy and I are actually saying the same thing; and neither of us is placing a heavy reliance on the past few decades. We can quibble amongst ourselves on the minutia or we can agree on the big picture. Inflation is fraud and theft; regardless of whether it is a 2% rate of theft or a 3% rate of theft, it is still THEFT! We should NOT tolerate intentional inflation. Whatever amount of money is in the money supply is always sufficient; the monetarists are simply wrong from an economic perspective. Does anyone besides me find it amusing the monetarist school is thought is also referred to as the Chicago School?
        Reply | Mark as read | Parent | Best of... | Permalink  
        • Posted by CircuitGuy 9 years, 2 months ago
          @ Jax: I've gone round-and-round with people on this. I do not get the wealth theft thing at all. If money loses value at a predictable rate, the only way you lose money from that is if you hold it as a store of value, which would be dumb after saying it is *not* intended as a long-term store of value.
          Reply | Mark as read | Parent | Best of... | Permalink  
          • Posted by 9 years, 2 months ago
            For any commodity to be used as money it has to meet these three criteria: a medium of exchange, a unit of account, and a store of value. A medium of exchange is anything people are will to accept in exchange for things of value. A unit of account refers to the ability of money to express the value of a thing, actually anything that has value can have its value expressed in terms of how many units of money it is worth. A store of value infers that holding money will not result in a loss of buying power. Why would I be willing to exchange my work today for dollars if the buying power of those dollars diminishes over time? How much time? Any amount of time! A dollar should be able to be exchanged for a good that is worth one dollar; it should not matter if I purchase that good today or next year. With our government intentionally inflating the money supply, the buying power of my dollar is reduced over time. In effect I have been denied some of the value of my money because it now takes more than one dollar to buy what $1 previously bought. Remember, our money is fiat money, and legal tender; so the same government that intentionally inflates the dollar REQUIRES us to use that dollar to settle all debts, both private and public with it. There can be no question if I hold money, I will lose some of my wealth due to inflation. The loss of wealth is obvious. Why do I say the government is stealing my wealth? If I lose value then someone must be gaining value and that someone is the counterfeiter - our government. That is why counterfeiting is a crime. The individual who is first to use the newly printed $1 bill can use that money created out of thin air to purchase $1 worth of goods. That additional money causes the value of all dollars in circulation to loose value because there is one more dollar in circulation, The counterfeiter clearly gains buying power and the holders of money clearly loose value. Is it a stretch to say that counterfeiter steals from us all? No, it is not; and since the government is the counterfeiter, they are the thieves! Notice that gold and other precious metals see fluctuations in their value when expressed in terms of a particular currency, dollars for example; but the relative buying power of gold remains fairly constant over time. The short-term fluctuations are leveled out over the long term so that an ounce of gold will purchase approximately the same amount and quality of products in 2000 as it did in 1900.
            Reply | Mark as read | Parent | Best of... | Permalink  
            • Posted by CircuitGuy 9 years, 2 months ago
              Thanks for the detailed reply
              "Why would I be willing to exchange my work today for dollars if the buying power of those dollars diminishes over time?"
              The reason is you're either planning to spend it soon or you're going to put it in some other store of value. You're correctly saying you lose some value as you walk from the person who gave you the money to the person you're going to give it to. I say money isn't necessarily free. There are costs of protecting it and remitting it.
              I do agree that it is a human right to create/use whatever media of exchange people want.
              Reply | Mark as read | Parent | Best of... | Permalink  
              • Posted by 9 years, 2 months ago
                Taking your statement to its logical conclusion means that if we put our money in a bank for safekeeping, we should PAY the bank a fee for protecting our money. Depositing money in a bank is no different than a grain farmer putting his grain in storage at a granary. The reason banks PAY us a paltry interest rate for our deposits is because they too are counterfeiters when they loan OUR money out to others. When they do that, two claims exist on the same dollar of deposit; I have claim to my dollar and so does the merchant who accepted payment from the loan in exchange for his machinery that he sold to the business that borrowed money from the bank. The bank is betting that we won't both attempt to withdrawal the full amount of account at the same time. The irony is that for some silly reason the public perception of bankers is one based on trust for a "conservative" institution. That is a crock!
                Reply | Mark as read | Parent | Best of... | Permalink  
                • Posted by CircuitGuy 9 years, 2 months ago
                  "we should PAY the bank a fee for protecting our money."
                  That's exactly how I think of it. I think of a bank account as insurance. I say insurance b/c the value decays in a predictable way, unlike other assets, which change due to market conditions. The banking system provides liquidity, and I pay for it. I don't keep a significant share of our net worth parked there.
                  Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by TahoeDagney 9 years, 2 months ago
        Seems like real inflation has averaged around 7% for several decades.
        Reply | Mark as read | Parent | Best of... | Permalink  
        • Posted by 9 years, 2 months ago
          I don't think we can actually know the rate of inflation with accuracy. The Keynesian definition of inflation is a general rise in the price level, which cannot be accurately measured; and the Austrian definition of inflation is an increase in the money supply, which cannot be accurately calculated because the Fed is not subject to any external monitoring. We are forced to go with a personal perception and some of us are being pinched a lot harder than others. The only certainty is that government numbers are a lie!
          Reply | Mark as read | Parent | Best of... | Permalink  
          • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
          • Posted by Robbie53024 9 years, 2 months ago
            If you use any type of money management or budgeting tool (I used to use MS Money, and now am forced to use Quicken), you can get your own personal inflation by looking at your expenditures for things like food, clothing, gas, etc.
            Reply | Mark as read | Parent | Best of... | Permalink  
            • Posted by 9 years, 2 months ago
              Robbie, I believe you are confusing cost of living increases with inflation; they are not the same. It is scary to see our standard of living being eroded as a result of inflation. I am retired, but work part time to avoid that scenario. When I am unable to work, I will feel the pinch that is felt by all fixed-income retirees; ouch!
              Reply | Mark as read | Parent | Best of... | Permalink  
              • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
              • Posted by Robbie53024 9 years, 2 months ago
                That's why I called it personal inflation. It is that which I face personally. If my income keeps pace with my costs, then it is merely a change in transaction fees. If I get less goods this year than I did last year, and my incoming is the same, that is inflationary to me.

                I understand the Austrian view on the cause of inflation (and I agree with it). But that is the cause, not the effect. The effect of inflation is either benign (income grows at the same or faster pace as price increases - which comes about via improvements in efficiency) or it is negative (prices increase due to more money, but that money isn't distributed throughout the system but rather is "stuck"). There is no positive effect of inflation.
                Reply | Mark as read | Parent | Best of... | Permalink  
                • Posted by 9 years, 2 months ago
                  The CAUSE of inflation is an increase in the money supply.
                  The EFFECT of inflation is that more of those dollars that are now worth less are required to purchase the same goods that could have been bought for less in the past.
                  There is a HUGH distinction in viewing the price are rising as the effect compared to the real effect that the dollar is losing value.
                  It may appear to be a matter of semantics but it boils down to are we people or sheeple? I like to call liars and thieves by their proper terms when they lie to me and steal from me. I am not inclined to let them slide by saying, with a shrug of their shoulders; "It's not fault; inflation is the culprit". I hope I do not offend you with my insistence on using words correctly; I am strongly anti-PC and I teach for a living. PC speech is bridge to controlling the thoughts (and minds) of sheeple.
                  Reply | Mark as read | Parent | Best of... | Permalink  
          • Posted by $ CBJ 9 years, 2 months ago
            The true rate of inflation is also being masked by rapid improvements in technology, which would significantly reduce the price of just about everything if the government were not always adding to the money supply.
            Reply | Mark as read | Parent | Best of... | Permalink  
            • Posted by 9 years, 2 months ago
              So CBJ, you believe that inflation is a general rise in the price levels. Are you a Keynesian? Technological advances will improve productive efficiency and tend to lower production costs which should lead to lower prices. Keynesians refer to this as deflation and somehow believe it is one of the two deadly sins for an economy, the other one is hoarding; most of us qualify as Keynesian hoarders by saving and NOT spending every dollar we have for consumer goods. Austrians believe inflation is an increase in the money supply regardless of the source; it could be government printing new money, counterfeiters printing new money, or banks creating new money when they make loans. In fairness to banks, money is destroyed and the money supply is reduced when loans are repaid. Too many people and business do not repay their loans, they simply roll it over. Individuals with credit card balances that are not reset to zero each month are also rolling over a loan. Both of these roll overs tend to increase the money supply.
              Reply | Mark as read | Parent | Best of... | Permalink  
              • Posted by $ CBJ 9 years, 2 months ago
                No, I’m not a Keynesian. My statement above holds true regardless of which definition of inflation is used. And loan rollovers do not increase the money supply; the amount of the loan stays the same, and the net effect is no different than if the loan is repaid (decreasing the money supply) and then immediately borrowed again (increasing the money supply by a like amount).
                Reply | Mark as read | Parent | Best of... | Permalink  
                • Posted by 9 years, 2 months ago
                  The two definitions have distinction, mainly because there is no such thing as "a general price level". Inflation does not cause PRICES to rise; inflation cause the VALUE of our currency to diminish; thereby requiring more of those dollars to buy goods. I agree that rollovers do not increase the money supply, they also do not decrease it as a loan is simultaneously paid and reissued. The only thing we seem to disagree on is your support for a Keynesian concept; you deny believing that inflation is defined by price changes and at the same time cling to that belief that inflation is a general rise in price levels. The only logical, and provable definition of inflation is an increase in the money supply. It worked really well for a few hundred years until Keynes published his book of lies. The Keynesian definition allowed lawmakers to play the Wizard of Oz and declare, "Pay not attention to that man behind the curtain", while they continued to increase the money supply and blame the poor economic conditions on inflation; which they promise to tame and keep under control for our benefit!
                  Reply | Mark as read | Parent | Best of... | Permalink  
                  • Posted by $ CBJ 9 years, 2 months ago
                    My original statement was:

                    “The true rate of inflation is also being masked by rapid improvements in technology, which would significantly reduce the price of just about everything if the government were not always adding to the money supply.” Nothing in that sentence is refuted by your post, and nothing in that sentence necessitates a “belief that inflation is a general rise in price levels.”

                    You said, “The only logical, and provable definition of inflation is an increase in the money supply.” How do you prove a definition? Definitions must precede proofs, as defined terms are necessary components of logical proofs. I have never seen a logical proof of the form "the definition of this word is so-and-so because . . . "
                    Reply | Mark as read | Parent | Best of... | Permalink  
                    • Posted by 9 years, 2 months ago
                      Thanks for pointing out my error. I stand corrected; one cannot prove a definition because a definition is a given, as you correctly state. But I stand by the first part of the sentence; The only logical definition of inflation is an increase in the supply of money. It is logical because it accurately describes the current situation. The Keynesian definition of a general rise in the price level adds to the confusion that exists today; we know that government has inflated the money supply, but prices haven't risen enough to be in sync. Why not? Because the USD is still being used as the world's reserve currency. This lulls some into a false sense of security; as if we can freely inflate without consequences and a belief that those world-currency dollars will NEVER come back to wreak havoc on our economy.
                      Reply | Mark as read | Parent | Best of... | Permalink  
                  • Posted by CircuitGuy 9 years, 2 months ago
                    "The only logical, and provable definition of inflation is an increase in the money supply."
                    This is true only if the number of goods/services in the economy remains constant.

                    "It worked really well for a few hundred years until Keynes published his book of lies."
                    The number of goods/services in an agricultural economy is more constant. An industrial economy creates more goods and services all the time. An information economy accelerates this further.
                    Reply | Mark as read | Parent | Best of... | Permalink  
                    • Posted by 9 years, 2 months ago
                      Are you implying the money supply NEEDS to be flexible? Does a greater amount of goods and services REQUIRE more money in circulation? Monetarists think so; but Austrians think that situation (economic growth with a stable monetary base) would simply result in stronger money and lower prices.
                      Reply | Mark as read | Parent | Best of... | Permalink  
                      • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
                      • Posted by Robbie53024 9 years, 2 months ago
                        Kind of like the difference between a regular stock that splits when the price gets to a level that "seems" too high, compared to Berkshire Hathaway, that never splits. It's mostly window dressing, isn't it? More money than economic growth causes degradation to the value of the currency, certainly.
                        Reply | Mark as read | Parent | Best of... | Permalink  
                        • Posted by 9 years, 2 months ago
                          A stock split is an expensive way to provide two 5-dollar bills for each 10 dollar bill. 100 shares at $20 each = 200 shares at $10 each. The value is the same but resources were expended to change from one condition to another condition that are both equal! Buffett has it correct; avoid stock splits and continue to invest the money that would have gone to funding one. There is no free lunch in the real economic world; everything has a cost and someone has to bear it.
                          Reply | Mark as read | Parent | Best of... | Permalink  
                          • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
                          • Posted by Robbie53024 9 years, 2 months ago
                            True. But at some point, you need to develop smaller fractions of currency, as the value of one unit far exceeds the purchase price of minor goods. Theoretically, a dollar could purchase a car, but what unit would you use to purchase a loaf of bread? You'd need some sub-fraction of a penny. Doesn't that cause similar problems?
                            Reply | Mark as read | Parent | Best of... | Permalink  
                            • Posted by 9 years, 2 months ago
                              Smaller fractions are not a problem at all. One of the requirements of money is to be devisable. My mom used to tell me when she was a child penny candy, clack jacks for example, were sold as two for a penny because the half-penny was not a coin of the realm. Realistically, our government is seriously considering eliminating the penny as a result of inflation. When I was a child I could actually buy things for a penny, a nickel, or a dime; there was even a chain store, Franklin's Five and Dime, in which all items sold either a nickel or a dime - today we have Dollar General! Can a penny, nickel, or dime buy ANYTHING today? I don't think so unless it is to purchase a special promotion of some sort. Our economy would have to change dramatically before the need for a half-penny surfaces!
                              Reply | Mark as read | Parent | Best of... | Permalink  
                              • Comment hidden by post owner or admin, or due to low comment or member score. View Comment
                              • Posted by Robbie53024 9 years, 2 months ago
                                Yes, I understand. But take the growth of Berkshire Hathaway. In April of 1980 the share price was $320. Yesterday's close was $225,140. If that represented our currency, that penny that purchased 2 candies in 1980 (well, it didn't then, but this is only for illustration), you would now take away over 1400 pieces for that same penny. That's unwieldy. You would need a 1/703 fraction of a penny for those 2 pieces. I don't know that I could slice a penny that thin. Of course, digital currency would solve all that, but we don't have one (and I pray we never do, as at that point there will be absolutely no control on the amount of currency in existence).

                                No, I see smaller fractional currency as not workable, thus some form of currency growth is useful.
                                Reply | Mark as read | Parent | Best of... | Permalink  
                                • Posted by 9 years, 2 months ago
                                  You are completely IGNORING the GROWTH of the investments under the control of Buffet with BH. The increase in share price IS NOT the result of inflation; it is primarily a result of capital appreciation, or growth. If you want to see the inflation rate for that time period compare the dollar since it does not contain any capital appreciation. Talk about cherry picking facts!
                                  Reply | Mark as read | Parent | Best of... | Permalink  
                                  • Robbie53024 replied 9 years, 2 months ago
                      • Posted by CircuitGuy 9 years, 2 months ago
                        "Are you implying the money supply NEEDS to be flexible?"
                        I see what you're saying. If we didn't expand the money supply, you could gain value from a growing economy just by parking money under your mattress. You wouldn't have to use financial services companies and tax efficient strategies. That has appeal.
                        Reply | Mark as read | Parent | Best of... | Permalink  

FORMATTING HELP

  • Comment hidden. Undo