Imagine a giant caldron or pot as high and as large as the tallest building you’ve ever seen,
filled[ with money, paper bills, with over 17 trillion dollars in it. This is the Gross Domestic Product, the GDP, the amount of wealth produced in one year in the United States. It represents the monetary value of all the goods and services produced and consumed in a twelve month period. The money is a paper means of exchanging all this wealth and productivity, all the goods and services produced in one fiscal year. It has no real value except as a token of transfer, goods and services for goods and services. There is nothing behind the dollar except the word of the Federal Government. Gold, which has a high value, cannot be used for money because there is not enough of it in existence to meet the financial needs of any of the many industrial nations.
The real wealth is what is produced and exchanged. The money is merely the means of exchange that rates one unit of productivity against another and is used nationally or internationally. The currency, then, is the tool through which this system of exchange occurs. It can be used immediately or stored in institutions like banks or credit unions and used at some point in the future. Money can also be used as a commodity, loaned or rented out with interest for a period of time or it can be used for all sorts of investments that pay interest or dividends. It is in every case a tool to satisfy different types of wants and needs.
To consider money as the source of wealth is to be naïve. The amount one has through earnings or inheritance can be used as a sort of score to determine one’s level of success against that of all other people in the society. It is a government supplied tool that allows for the productive functioning of society.
It is the responsibility of the Federal Government to keep enough of it in circulation, a constant cash flow, so that full productivity occurs. A shortage of the money supply in the nation can cause economic recession and eventual depression. An excess amount of money in the National Economy can bring about run-away inflation, too much money available for the goods and services produced. The Federal Government’s task is to provide just enough for full employment and full creation of the goods and services needed for the highest possible standard of living for the entire population.
This is not easy and requires constant readjustment because, according to the U.S. Census Bureau the population of the nation is increasing at the rate of one additional person every eleven seconds. This figure includes births, immigration, and deaths. In 2010, the time of the last National Census, the estimated population was 308,745,536, and this was considered a low count. While an adjustment upward was made a year later this figure was used for the apportionment of seats in the House of Representatives.
One has to keep in mind that in addition to this number the population since then has increased at the rate of 5.46 people per minute, 327.27 per hour, 7,854.55 per day, 54,981.81 per week, 2,866,911 per year, plus another 7,854 for leap years. The money supply has to be continually increased to keep up with these ever-growing numbers or the country moves in the direction of economic constriction, unemployment, recession, and finally depression. All this is supposed to be done by the Federal Reserve with the aid of Congress and the President.
The Federal Reserve continually monitors the economy and continually makes its adjustments through Monetary Policy. It can strongly but not completely affect the amount and flow of currency. The other section of the Federal Government that is supposed to continually affect the level of economic prosperity in the country is Congress. They do this through fiscal policy; passing laws that can diminish or create employment throughout the United States by either increasing or decreasing government spending. In essence through the passage of laws they can constrict or expand the cash flow and the level of employment
If we look at the actions of the Republicans in the House of Representatives from 2011 on, when they gained control of that body, it would seem that they by their actions are working very hard to bring this country into an economic depression and not allow for any recovery from the Real Estate Debacle of 2008. We are still, six years later at seven plus percent unemployment. Millions of people are still not earning enough to maintain a decent standard of living. There is growing hunger in America, that many people are not food secure. What are the Republicans proposing and trying to push through Congress? Massively reducing food stamp and other programs that are vital for the proper survival of fifteen or more million people.
Their version of job creation is to massively reduce Federal spending for entitlement programs while wasting twenty-five billion dollars on shutting down the Federal Government for a period of time. If one looked for a plan to destroy the United States or make it into a third rate nation then one would do exactly what the Republicans in Congress have been and are trying to achieve, to bring a large part of the population into despair and desolation.
The Republicans are acting like the Hoover Administration did from 1929, when the Great Depression broke, until 1933, when the Roosevelt Administration came into being. Is it an act of maliciousness or just simply economic ignorance? They are attempting to run the country as they run or ran their household budgets. One Tea Party Congressman stated that he understood economics because he had raised a family. They are making money the object of value and ignoring the potential productivity of the nation. They are actually using the principles of Microeconomics, which works well with households, businesses, and state and municipal governments but can create disaster if it is used to run an industrial nation of over 300 million people.