Billionaires Bill Gates and Warren Buffet have an idea. They are trying to get other super rich people to give away half of their money. It’s called the “Giving Pledge”. They have managed to get 40 other like minded people to sign this pledge. This is a charitable act that I commend them for, and there probably will be a few jobs created. Someone has to make a decision about who qualifies for this charity. Someone will have to oversee where the money goes. I just can’t see how this will fix an inherent problem in the economy of America. It is charity, not job creation.
Money is not an infinite commodity. The more we print of it, the less it’s worth. As it’s worth diminishes, the less it can buy. With 50% of American money in the hands of 2% of the population, that leaves the remaining 50% in the hands of 98% of Americans. Despite the bill of goods we’re being sold about trickle down economics, it is the goods and services that 98% can purchase which actually determines American economy. How many jobs are required to manufacture the good purchased by 2% of the population compared to the goods which can be purchased by 98% of the population? Supply and demand. No one can afford to create a supply when there is no way to create a demand. Buying power is in the hands of the upper 2% and there aren’t enough of them to create any kind of demand.
For the past 30 years we’ve been spending plastic money. It’s not that we weren’t spending credit before that, it’s that credit spending was controlled. My parents purchased furniture, appliances and other items like clothing on credit. The difference was that they didn’t continue to increase their debt amount, they paid off what they owed before spending more. We didn’t live in a society where we were judged by how expensive the items we owned were. We were not a society enamored of status symbols and celebrity. We were judged by how well we fed, and clothed our families and by how well we educated our children. We were judged by how well we helped each other through rough times. We didn’t ask for handouts, we took care of our own. Back then we had no deficit, we were paying higher taxes.
Plastic money allowed people to spend more than they could actually afford. It changed the way we looked at our income. It gave us a buying power that we didn’t have prior to it’s invention, however, it also increased our debt to the point that many were no longer able to afford to save. No longer were we limited to living on what we made, we could spend, spend, spend and worry about paying back what we’ve spent some other day. We developed champagne tastes on beer pocketbooks. Is that what happened to the American economy? I don’t know. I do know this.
Fifty years ago, the working man used to pay close to 35% of his income in taxes, yet he still could support a family on one income. There were a wider variety of stores to shop in, and American made products were sold at a reasonable price in almost all of them. We took our paychecks to the banks along with our savings account passbooks and deposited a percentage of our income into our accounts. Banks offered Christmas and Vacation accounts back then. We saved for those events. The interest we earned was small and steady, none of us were going to get rich quick, but there would be the comfort of knowing we had something put by for a rainy day.
Now it takes two incomes to raise a family. We can’t find American made products in most of the remaining stores no matter how much we’re willing to pay. Educating our children has become less of a priority to the point where big corporations must hire the brains from other countries in order to stay competitive. Instead of low interest savings accounts we put our money into 401Ks where we lose much of it when Wall Street blinks as it so often does these days. We scream that at 12% we’re paying too much in taxes, yet we look to the government to take care of us when times get tough. Even when the very richest of us needed taxpayer money to survive, we still didn’t get it. We’ve lost our economic stabilty and our buying power through choices we made. We are just as plastic as the credit we spend. Plastic people living in a plastic society, spending plastic money to live our fake plastic lives. When the plastic finally snaps what will we do then? Maybe the Giving Pledge will bail us out?