Governments Cannot Create Wealth

Governments cannot create wealth.

But neither can people create very much wealth without intelligent people in charge of government that know the difference between money and wealth.

A person on the government payroll may or may not create wealth. A teacher does not create wealth, but he/she plays a critical roll in the education of its citizens so that with jobs they can create wealth.

A policeman on the government payroll does not create wealth, but one of his jobs is to protect wealth.

Many people confuse money with wealth. Money is a public utility that distributes wealth. Money by itself is not wealth. Picture yourself on a desert island with a billion dollars and no way to get off the island to buy food. How wealthy would you be?

The wires in the power line are not electricity but only the utility that makes it possible to use the electricity.

The money in your pocket or bank account is not wealth but only the public utility that makes it possible for you to use the wealth produced by someone else.

The thermometer is not heat. The barometer is not air pressure. Rising prices is not inflation. Rising prices indicate how much the money supply has been increased or inflated.

Tinkering with any of these measuring devices will not control any of the things that they measure. Messing with prices between the different things we buy is totally a waste of time until the quantity of money is brought under control. 

When the Spanish took the gold to Spain after the discovery of America, prices went up all over Europe. When gold was discovered in Alaska, prices went up. When it was discovered in California, prices went up. Prices always go up with an increase in the money supply unless there is an increase in production of goods and services to absorb the extra money. There are no exceptions to these facts concerning money and price.

Money in the United States is apparently out of control. Unless our Congress takes the necessary steps to bring it under control, we are on our way to the hyper price increases that happened to Germany in the 1920-30s when a million marks would only buy a loaf of bread.

Worrying, fussing, cursing, and screaming about the price of gasoline is an exercise in futility. All prices will continue to go up, some more than others, until our government gets money under control through some or all of the following:

1. An export tax on the sale of our productive wealth to stop the selling of factories, farms, forests, and any other wealth that is used to produce goods and services.

2. A 90-percent graduated tax bracket on net incomes of a $100 million or more. This would still leave about $35 million to spend and invest in the production of goods and services.

3. Get rid of all tax cuts and tax-exempt gimmicks used to get out of paying taxes.