The Value
of
MONEY
Whatever happened to the
good old 5 cent Cigar?
It was burned to ashes
by tax raises which are
getting hotter by the minute!
|
Whatever happened to the |
by Lin Stone
Copyright © 2000
All Rights Reserved
It is not backed up by gold.
It is not backed up by silver.
The only thing backing it up is inflation.
And, inflation has that dollar backed up to the wall.
Inflation isn't something that happens to the economy; it is something rulers and governments do to the economy. Adam Smith, author of The Wealth of Nations, says that historically "the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins."
He then mentions that the English coins (at that time) were only worth 1/3 what they had been, and that the French government had reduced theirs to 1/66 of its original value, all in order that the rulers could pay off their debts with money worth far less than it had been.
In our own recent past, even before Interstate highways, modern factories and the miracle advances of super electronics were on the scene, merchants, suppliers and manufacturers could all make a profit on a pair of pants which sold retail for one dollar. And there was NO sales tax for customers to fork over.
Today the same kind of pants sell for $30 a pair.
"But wait a minute," you say. "That isn't the same money. Some people were working for 10 cents an hour back then, today they won't work for less than $4.25."
Hey, great. You're smart enough to count up the difference.
Now, let's do some more counting.
It took 10 hours of work by the common back to buy a pair of pants in 1900, with no taxes to
fiddle with.
At $4.25 an hour you'd still be working a whole 7.06 hours for that pair of pants.
I know -- you are impatiently frowning at my ignorance already, but I'm not through counting yet.
From that $4.25, because of increased taxes, you only get to use $2.89 for spending purposes. Therefore, in actual spendable income, when you revalue today's buck to compare it with yesterday's dollar you are only earning $0.096 an hour. That means that today's common laborer is earning less than the general laborer of 1900.
| Okay, Okay. I'll concede that today's pants do look better on women -- if you will concede that if I had added in the up to 14% of sales taxes some retailers collect on that $30 pair of pants to our figures here that the year 2000 workers would be even worse off. |
THERE ARE hidden COSTS AS WELL. there are now well over 3,000 different taxing entities in the U.S. Can you imagine how much money is paid out for collecting, tracking and processing the money that is collected?
Now imagine another army of politicians working night and day to justify their job of ruining friends and influencing elections with what's left after paying themselves "a decent wage."
The only reason that people are living better today is the effect of the great technological advances business and science (not the government) has made -- efficient cars, better roads, better fuel, the super sergers and that great miracle of electronics, et al.
However, the only reason we are not 10 times as far ahead is that we've been letting the lawyers heading up our government corrupt the value of our money through inflation. Indeed, if we had not let the government monkey with our money, if the value of our currency had remained fixed, we would be far better off because we would never have stood for such outright robbery of our resources.
There wasn't enough taxes to fiddle with at 10 cents an hour at the turn of the century. By 1942 sales taxes were still only 1/10th of a cent. Today the average wage earner is paying 31.2% in taxes on every dollar earned, according to the Wall Street Journal. From 1800 until 1942 the value of money remained relatively stable. From 1942 until 2000 your one dollar bill literally became worth ten cents.
Every time wages go up, taxes increase faster than a speeding 1040 EZ. As recently as 1950, all the individual income taxes collected by the Feds only came to $17 billion.
With a population of 150 million, that means that every man, woman and child in the U.S. would have been paying an equal share of $113 per person. Just 38 years later the Feds collected about $400 billion in individual income taxes from a population of 250 million. That means that our equal share came to 14.159292 times as much, or $1,600 each. Why then weren't workers earning 14.159292 times as much as they did in 1950?
Remember too, during this same period states sales taxes have gone up an average of 70X -- from 1/10 of a cent on the dollar to 7 cents on the dollar. Yes, I know one state has 14% going for them, but that is just a taste of the future, let's continue.
Has the price of license plates gone up?
Are you contributing more to that social security fund that's going broke?
Have property taxes risen slightly?
The Minimum Wage Myth
The easiest way to get more of our money was to persuade us we had more money for them to get, therefore Presidents and Congress keeps shouting about raising the minimum wage. Raising the minimum wage is just a sop to keep us peasants from revolting, just like the French used to remove the tax on salt when rebellion was imminent, and then double taxes on sugar or something else.
The same thing happens when the minimum wage is raised.
We get a check with bigger numbers on it for the work we do. Then we pay more taxes because we have more wages. This lets the government spend more. What we end up with is we have less than ever, and have to catch up again. Stop the Sham!
We don't need higher wages; We need lower prices.
Here's the trap of raising the minimum wage. Any time our wages go up
we naturally pay more taxes because we have MORE money to tax. Every time wages go up now, politicians insist that the millage at which all of our taxes are collected must go up as well because THEY just can't cope with less. If that is true, then why do they expect US to cope with less?
Instead, it now takes TWO wage earners per family where one working used to be enough to keep body and soul together. Even worse, instead of solid money, we are paid off with money subject to constant theft by the inflation caused by these very politicians.
Not only are we being taxed --- that dollar earned today will only buy 92 cents worth of goodies tomorrow, and 80 cents by year's end. Before the decade is gone, it won't be worth a plugged nickel -- leaving us to scramble for our own old age security.
Meanwhile, governors and mayors all across the land are slashing taxes for and making loans to foreign companies in order to induce them to bring their management system in for us to suffer under. Newspapers herald such events with banners saying:
CHRISTMAS COMES EARLY
Well, for goodness sakes, if foreigners are so much smarter than we are then it is high time for US to import some foreign politicians!
There is no denying the progress we have made lately: The mail runs almost as fast today as it did in 1900: And, we only have twice as many people going hungry now as then, too. Ostriches will insist on pointing out there are televisions today, computers, and paved roads from one end of the country to the other, not to mention hundreds of other wonders, like the web.
Well, my thought is: If the lawyers and politicians had left our taxes alone, all these improvements and increased productivity would have created so much wealth in the United States that the whole world could not hold it!
All the progress we have ever made over the past three centuries can be traced to giving the common man more opportunity to gain wealth.
Opportunities to create wealth is the only thing man needs for progress to be made.
| Millionaire entrepreneurs are not essential. Provide enough opportunity and God will provide enough opportunists. If we just multiply the number of people who can make improvements we will subsequently multiply the number of improvements being made. The more hope there is to get ahead, the more wealth any nation will create. However, when the little guy on the street believes there is no use to go on with his honest hustling then progress comes to a halt and crack dealers proliferate. |
Nothing generates enthusiasm like seeing genuine hope instead of tricky promises. With more money out there to grab, more people will be hustling to get a bigger share. Those whose ventures fail will be throwing money back into the system at the grass roots where it is needed. Those whose ventures succeed will be creating more wealth at the ground level by working more efficiently than
ever before, which is the very foundation of our national wealth.
Henry Ford perfected the process of deliberately putting more money into the hands of common laborers. Suddenly, the best people anywhere wanted to work for Ford.
This galvanized his entire operation.
By paying more real money, Henry Ford got better help.
By getting better help he reduced prices.
By reducing prices he made more sales.
That meant that more people could be hired and there was more money to spend on improvements.
It also meant that other manufacturers had to pay their good workers more, or lose their best ones to Henry Ford.
More importantly, it gave people money to spend right where it did the economy the most good. Unfortunately, when the government saw that workers were earning more, politicians began wanting more.
There are only three basic ways for the government to get more money from us:
take it away by raising taxes,
borrow it from us,
print more paper without backing it up.
Our government did all three, then did it again, and again, and again.
Each time there was a plausible excuse for the "necessity".
Each time, workers ended up with less left in the pocket.
This isn't anything new. It has been going on since long before William the Conqueror was a baby.
If our money had at least been founded on something of solid, substantial value, it would have taken much longer for our pockets to come up plumb empty while Congress is voting themselves yet another pay raise and inexplicably experiencing a dramatic increase in the fortunes of their family and friends at the same time. To stop this travesty of justice, our monetary system must be founded on a commodity whose value never changes; and we must cast our tax structure in concrete so that it never rises.
When the value of our money is always the same, then the price of everything else will always reflect the precise value of that product or service to our society at that time. Consequently, the true value of the gross national product our country is able to produce will only rise and fall in the absolute terms of genuine wealth, never in false hopes or glittering promises.
Gold won't work. Nor will silver.
When gold was our standard, Fort Knox was flooded with the stuff and it wasn't even earning interest.
Keeping our gold bricks in a dungeon didn't keep the dragon on a leash.
Our gold was just sitting there useless when it could have been working to make us more wealth.
Where is the sense of that?
A guy named Alfred Lawson came up with the Direct Credits idea of backing up our money with property. That was a better idea, but just by changing the price of our property government would have been able to cheat us out of more and more money. Basing our money on some imaginary GNP is just as unwieldy, and not to mention being subject to political fraud.
| The only commodity on earth whose value never changes is time. |
In the book The Wealth of Nations Adam Smith makes these shrewd observations: "The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it."
He added: "By the quantities of labor we can, with the greatest accuracy estimate it (the real value) both from century to century and year to year." As he so ably points out, this cannot be done with any other substance on earth!
Within an earthly frame of reference,Therefore, if we anchor
the value of our dollars
to units of time
then our economy is locked into reality.
To begin anchoring
our money to time
all we have to do
is make the value of one dollar
equal one hour of time at work.
One of our hours of time would equal one dollar.
If every dollar you earn today is worth one hour of time
then every dollar will still be worth one whole dollar
even one hundred (or one thousand) years from now.
It will still be worth one hour of time.
Each one of us has 24 hours of time allotted to us each day.
No one has any more than that.
None of us receives any less.
We are all equal in this respect.
Through diligence, leverage, practice, training, education, efficiency, planning, or strength each of us has the opportunity to make the results of our time invested in work be of more value than the results of time at work invested by those around us do.
That is immaterial to the equation.
Time has not been stretched, or altered.
We still only have the same 24 hours others receive.
So, let one hour of time at work equal one dollar.
Let one dollar be worth one hour of time at work.
Obviously, if one dollar is to be worth one hour of time then
someone must be willing to provide one hour of work for that dollar.
There are those who (forgetting the recent past) will claim that one dollar an hour is too little to work for. That idea comes from looking at one of the paper dollars in our midst today, which won't even buy half a loaf of good bread.
However, just as a pair of pants was only $1.00 when wages were 10 cents an hour, if one dollar is worth one whole hour of work, then it necessarily follows that one dollar will then be worth enough to purchase all the bread one hour of work will now produce.
| After the conversion of debts and savings to the new system, all of our numerical prices will rearrange themselves to fit the new value of our currency. Better yet, as the results of our labor improve, the purchasing power of our money will increase. |
This will accomplish two important goals.
#1, it will insure that the elderly and the poor
can always get work done for them inexpensively.
#2, it will guarantee that prices for wages, goods and services
are always quickly stabilized in spite of swings caused by fluctuating supplies and demands.Wages cannot go up excessively because people can have their money redeemed at one hour per dollar at any time. Wages cannot fall below $1.00 per hour because the dollar is redeemed with labor. With wages stabilized along with expenses, vendors will be compelled to maintain lower prices in order to remain competitive.
Consequently the bargains you see will be real bargains.
With this done, our money now has a solid redemption value which we can depend upon throughout our lives. A dollar earned in our youth cannot lose its value before our retirement. And if by our diligence, intelligence, wisdom, leverage, planning or training we have gathered more than those around us, then we shall reap more abundantly than they in our golden years. Inflation shall not rob us because inflation has been stopped dead in its tracks.
Naturally, each generic dollar is only worth one hour of general labor. It cannot therefore be redeemed for an hour of time from any specific person. Nor can it even be redeemed for the labor of a specific skill category. Since the dollar you own is generic, the laborer performing the redemption must be selected by chance.
This is in the redemptive sense only. The redemption of our currency is only desirable when its value is perceived as greater than available through normal spending habits. You can SPEND your money with anyone, or anywhere; it can only be REDEEMED from a labor pool selected by chance.
This precaution insures that there can never be an over abundance of currency put into circulation on us. And that in times of expansion the economy can be supplied with enough currency to fulfill the measure of its purpose. It therefore follows that to obtain that pool of labor a continuous supply of laborers must be generated.
This is done by a citizen conscription.
Anyone wishing to obtain citizenship shall, besides the requirements already made for naturalized citizens, be required to provide One Hundred Hours of their time to the labor pool. Only by freely providing these hours can anyone become a citizen.
As each call for a redemption comes in, the next person on the list goes out, even if the grease trap needs cleaning or a yard raked. No more than 8 hours a day would be required of anyone at a time. When not on call, people in the pool could work anywhere else. However, their citizenship cannot become operative until all one hundred hours have been submitted.
Only those who value citizenship will put forth the effort to become citizens, thus ensuring a better class of voter. As their desire to become citizens is the power which provides the value of our currency, hard working new citizens will be welcomed. To make citizenship even more meaningful, only full citizens can own real estate, vote, hold public office, or possess firearms.
Once their price for citizenship has been paid, any citizen may return to the labor pool at the head of the line for as long as necessary to sustain themselves until able to earn a living elsewhere, only now they KEEP every dollar they earn, and the Treasury does not get a cent.
In other words, when the job market shrinks those people who are already citizens will have the privilege of securing what work is available at the lowest rung of the labor ladder, IF they need to. This is the safety net which insures there need be no homeless or financially helpless.
As long as there is money wanting to be redeemed then citizens will have the opportunity to work. When prosperity is growing, jobs will be plentiful and new citizens welcomed to keep enough money in circulation and inflation down -- Supply, and demand.
Once you obtain talents, skills, or resources which enable you to command better pay than $1.00 per hour then you are encouraged to do so.
And those people good enough to start and maintain their own business shall have that privilege jealously guarded. In the great spectrum of labor, each band shall be regulated according to the skill values set from within their own ranks. Like the guilds of old, each band of the spectrum shall establish their own standards of performance, anyone meeting those standards cannot be denied membership.
While anyone can change guilds as the monetary rewards fluctuate, no one can be a member of two or more guilds simultaneously without forfeiting the financial remuneration guaranteed by the guilds. To wit, each guild shall collect enough from its working members to pay all of those at the same rate who are not working.
By dropping the price of wages the guild will put more people to work. When there aren't enough people in the guild wages will go up to entice others into it. The minimum pay allotted to each rank they establish will be set by supply and demand for that particular talent, on a regional basis.
No employer can pay less than that amount to anyone working in the capacity of that rank, except for a private contractor. And, any of those working for any government branch or office shall not be paid more than the minimum for that rank.
When too much work is available, minimum wages will be raised across the board in order to induce more workers into that field. When the supply of workers exceeds the demand that rank will be compelled to reduce their acceptable minimum wage across the board.
This eliminates the need for unions
while guaranteeing good wages for all qualified workers at the same time.
Government, being responsible for our fiscal policy, shall be held accountable for the redemption of our currency when more calls are made for redemption than the labor pool of prospective citizens can redeem.
When calls for redemption cannot be met because our fragile economy is getting fragged by politicians, then ALL those people working for the government shall immediately go on line. Their names shall be put on the the top of the list of available labor to redeem our currency.
| When grass needs cutting, THEY cut it. When floors need scrubbing, THEY scrub them. In 8 hour sequences, chosen by lot from the highest executive to the lowest plebe, they shall work without pay to redeem the calls on our currency until our currency IS sound again. |
|
In conclusion -- Giving ourselves a dollar founded on honest value will create all the genuine hope any nation on earth could ever wish for.
We don't need more money.
We need our money to buy more.
Only when we our dollars are worth more
will we have more real money to spend.
When we put a ceiling on what Government can waste
we will halt the spiral of inflation.
It is time the government stopped playing games with our money.
It is time to make our money worth every minute we put into it.
the end
Please tell your friends they can find this article at http://www.talewins.com/Treasures/essays/money.htm
Then ask your representatives to quit monkeying around with your money. Anyone who won't respond in less than two weeks needs to be replaced.
The question comes to mind, why not make one hour of time worth $10 so that it looks like we're earning more. That would be great, psychologically.
Unfortunately it would also strain the value of the coins we have to manufacture.
Leave a little note for the author Lin Stone
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