Is the economy zero-sum? That is, there is a specific amount of economic tokens m; and m is static (or the rate of change of m is so small it can be considered negligible). So, the "money" just processes itself throughout the population and institutions; all the while, never really changing.
That can't be right. The production of goods and services rises over time creating more economic tokens, right? But, population also increases. So, if you have a population of p, is the following ratio mostly static: m / p
The economic system is confusing. They really need to get http://www.askgreenspan.com/ up and running. There has to be an F=ma, V=IR for it.
And, while I am on the subject, what the heck is the National Deficit? Is it just a paper number -- the government, on paper, brought in x dollars in 2002; but on paper, they spent y dollars where y is greater than x? So, it's a distributed debt to a bunch of different sources? Can the National Deficit (and the underlying effects thereof) be derived from the F=ma of the economy? If not, it should be.
This all comes from watching Dennis Miller on the "Tonight Show" last night. I don't like comedies, nor do I much care for comedians; but he and Jon Stewart are just witty -- very funny fellows.
Comments
Ever since we switched off the silver standard, money lost it's meaning.
It's created by any amount of incurred debt, say a mortgage. It's secured by a number of additional items (some equally lacking in real value) including invested monies including what's in your checking account.
In effect, since you're not currently using your money, the bank turns around and gives it to someone else, and charges them interest for it, which you have to pay for first.
That's why bank runs are so bad. The banks simply don't have enough money to pay out everyone if they suddenly demand their money back.
As far as the deficit is concerned, you've actually hit it right on the head. It's the amount of money we owe.
I think we should have an economy based on monkeys.
> I think we should have an economy based on monkeys.
Hear, hear!
It is amazing how very rarely this question is raised. How come we know so little about something that appears to more and more become the very center of our existance and dictates many decisions in our lives - money?
Following these questions one's research will quite often be obstructed by very vague and inconsistant pieces of information and one might come to the conclusion that either nobody knows for sure anymore (which is quite scary), or somebody does not want this to be known by the public (which is even more scary).
I don't consider myself to be a paranoid conspiracy-theory-addict, but this subject surely does raise some suspicion.
Just a simple example: How come _every_ nations depth is _always_ growing? If the national depth is something owed to any/all of the other countries and their national depth works the same, don't these depths just cancel each other out? So, if the nations don't owe this money to each other, who do they owe it to?
Or, how much sense does it make (and how does it work at all) to 'borrow' money from countries that don't have money to loan but instead 'borrow' money themselves? So where is the money 'borrowed' from?
Now based on this above riddle, how can one nation measure and adjust the proper amount and value of its currency, let alone the exchange rate with other nations currencies, especially without the gold standard providing at least some basis of calculations.
Here it is also interesting to look at how money - in its physical form - is created and makes its way into our societies' economy. Who decides - and on what grounds - how much is 'produced', who 'produces' it and who 'ownes' the bills and coins out there?
Of course, it is quite understandable that our monetary system is not self-explanatory on first sight, but even on second sight it sometimes rather seems that here's a classic case of a tail wagging the dog.