Showing all posts tagged money:
Money's value is as an exchange medium.
The more concentrated the money becomes, the less it is being exchanged.
When less money is being exchanged, the economy grows more stagnant.
If the economy continues to grow more stagnant, recessions typically take hold -- and deflationary pressures begin to realize the underlying devaluation of the currency and reflect that by lowering real purchasing power.
Suppose one person manages to hoard all the money (essentially this is the condition of Gini Coefficient = 1). Then, money is worthless. It ceases to have any exchange value.
Sadly this thought experiment isn't as extremist or far-fetched as one might think, considering the stats:
The three wealthiest individuals in America own more than 50% of the domestic populationThe eight wealthiest individuals in the world own as much as half the entire planetAnd this doesn't even begin to broach the topic of how overly concentrated money affects political power...
The federal debt is sort of like the balance on your credit cards, except with much lower interest rates (which we set ourselves). It also hasn’t been spent on consumer goods: it’s been spent on providing federal services, social services, and — generally — running the government.
So, once again this election cycle you will hear histrionic cries about how the national debt should trump (ahem) other priorities in the economic plan.
As long as we are comfortably able to keep paying the interest payments on the debt, there’s no particular reason to really worry about it — certainly not to the point of failing to provide needed services for the government. We have a solid track rating of paying our debts — one of the best in all of history — so we should probably not have a hard time refinancing if the situation ever becomes dire.
We pay about 2.5% interest on the debt, which ends up being a small fraction of our ~$17 trillion GDP. Much of the “debt" is actually money we t...
i like this confessional personal finance piece that's like "ok, it's a game, & i'll tell you the secret: it's a game! learn the secret."
"This is not optional"... but we won't teach it to you. You're on your own with that.