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To: Uncle Ike; TexasNative2000

What’s missing is “creating wealth vs. redistributing money”, and that “both wealth and money are not durable”.

Too many assume that the economy is just a matter of stirring the pot, getting money to move around. If somebody doesn’t have money, they can just be given money from somewhere else and that’s supposed to resolve a problem.

A hamburger is something with intrinsic value. That’s wealth.
As a farmer (I’m not), I could take nigh unto nothing and raise a cow, lettuce, tomatoes, and wheat - then make a hamburger. That’s creating wealth.
You could buy that hamburger from me for $1; we exchange a token of value for something of value. That’s money.
You eat the hamburger, which is something with intrinsic value; the value is digested. Wealth is not durable.
I have $1, and a few hours later you’re hungry again; because you have no money, Barry takes that dollar from me and gives it to you. That’s redistributing money.
I sold my hamburger and was taxed 100% on my revenue from it; because I have nothing taxable but am now poor, Barry prints another dollar and gives it to me - there is now $2, but the value of each dollar suffers 50% inflation. Money is not durable.
Now we have two dollars and no hamburgers. All value has been destroyed, and no matter how much money is printed there is no more value until someone creates it independent of the money supply.

Creation of wealth attracts money; those lacking wealth give money to obtain it. Wealth being non-durable, the latter soon find themselves with neither. Leftists think they can just take money from the former and give it to the latter, and are perplexed by (A) the continuing accumulation of money by wealth creators, and (B) the decline of wealth creation as wealth creators see little benefit beyond giving away what they create just so they can keep getting their own money back. As wealth creation declines, more money is printed in the theory that it can buy more wealth, and more prohibitory regulations are enacted to shore up the flow of money within the system - further discouraging additional wealth creation. Those thinking money=wealth end up destroying the creation of value, leaving an economy with lots of money to spend and nothing to buy.


13 posted on 06/12/2012 1:56:04 PM PDT by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: ctdonath2

Applause!!!!!!!


14 posted on 06/12/2012 2:01:29 PM PDT by Uncle Ike (Rope is cheap, and there are lots of trees...)
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To: ctdonath2

Thank you for the excellent illustration.


19 posted on 06/12/2012 9:32:33 PM PDT by TexasNative2000 (Jimmy Carter's incompetence + Richard Nixon's paranoia = Barack Obama)
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