A Lesson in Economics

I, Ms Workingman, exchange my labor for money.

I take that money and exchange it for goods (lets say, goods I can eat.)

The store I buy my food from takes that money and;

1. Pays their mortgage
2. Pays their light bill
3. Pays their gas bill
4. Pays their employees
5. Buys more food for me to buy at a later date
6. Pays profits to their stock holders
7. Pays taxes

PAYS THE MORTGAGE- The money for the mortgage goes to the bank (who employees Workingman) who loans it back out to build other stores, businesses, and homes (all built by Workingmen, by the way). The interest they receive from these loans pays their mortgage, utilities, employees, taxes, and profits as well as making more money available for other loans.

PAYS THE UTILITES- The money for the utilities goes to the utility companies who pay their mortgages, employees, taxes, and profits as well as to buy more electricity and gas to sell to their customers, and build more generation plants, refineries, and wells (all built by Workingman), plus pay for the maintenance on the existing facilities (the money for maintenance pays for more salaries, taxes, etc.)

PAYS THE EMPLOYEES- Individual people have their own mortgages and utility bills plus groceries, transportation and all the expenses we are all acquainted with. They cannot afford to work for free any more than their employer can afford to give their products away for free. The employees also have to pay taxes.

PAY THE PROFITS- People give some of their hard earned money in exchange for stocks. Most of us now do this through our retirement plans making Workingman the biggest category of stockholder in the USA. Workingman expects to get a little money back every year in exchange for making this trade. He has no reason to buy stocks if he doesn’t get a piece of the profit. If he doesn’t buy stocks, the companies issuing the stocks don’t have enough money to start and run their businesses. If people can’t run their businesses, Workingman doesn’t have a job; no opportunities to trade labor for cash.
Profits received even by the richest don’t go to pad a mattress. Bill Gates spends his vast fortunes to buy big houses (built by Workingman), fancy cars (built by Workingman), expensive vacations (on planes flew by Workingman, and motels, restaurants, and resorts maintained and run by Workingman, etc). Money received by the richest goes back into the economy as salaries to Workingman or investment in the stock market that employees Workingman.

PAY THE TAXES-
1. Some taxes pay government employee’s salaries (allowing them to pay their mortgages, utilities, food bills, and taxes).
2. Some pays for a soldier to go fight the wars in other countries so the wars don’t come here.
3. Some goes to mow the city hall lawn.
4. Some goes to pay for police to hunt down and incarcerate those who take advantage of the weaker and who hurt others (criminals).
5. Some pays the courthouse mortgage.
6. Some goes to pave the streets and run the streetlights.
7. Some goes to pay for a standing fire department that serves everyone in case of emergency.
8. Some goes to pay the expenses for those who worked hard and paid taxes all their lives.
9. Some goes to pay people to not work.
10. Some goes to run the library.
11. Some goes to run the schools.
12. Some goes to pay farmers not to grow food or to grow the same food everyone else is growing.
13. Some pays to put up Christmas wreaths all over town in December and flags in July.
14. Some pays for young women to tell people how to raise their children (CPS).
15. Some goes to pay for committees that tell you what color to paint your house and what pets you are allowed to own.
16. Some pays for that sports stadium down the street.
17. Some pays for the park on the corner.
18. Some pays for someone to wash grandma’s dishes.
19. Some pays for the doctor to give your neighbor his shots.
20. Some pays for the college student’s nightlife.
21. Some pays to build damns.
22. Some pays to tear damns down.
23. Some goes to pay people who can’t work due to disability.

I am sure I left a lot out.

Look at the list again. How many of those things can you imagine family, church or businesses doing at least as good- if not better- of a job than the government?

 The first five I see as essential for the government.
 The next two could, theoretically, be done by private enterprise or at least private contractors, but I am not sure this would be better than what we have got now.
 Number 8 could and should be taken care of by the individual planning for his own future, but since we have promised to make these payments, we are honor-bound to continue them.
 The rest are unnecessary or could be taken care of through private means much better.

“The rest” is about a third of the government’s budget.

Imagine if Workingman and the businesses didn’t have to pay the taxes for all “the rest”? Some Workingman (either rich or poor) would open a business to cover numbers 10, 11, 13, 16, 17, 18, and 22 (and charities would cover 10, 11, 13, 14, 17, 18, 19, and 23, too). This starts the cycle all over again; more Workingmen are employed, thus paying their mortgages, utilities, food, and retirement… and oh, yeah, taxes (lowering the amount everyone else needs to pay).

The rest we could really live without.

Honest.