Money, the life-blood of the nation
Corrupts and stagnates in the veins
Unless a proper circulation
Its motion and its heat maintains.
– Jonathan Swift
For the first time since 2009, the rate at which the dollar moves through the economy on its way to becoming part of the Gross National Product has increased. The Federal Reserve data collectors had to extend the number out three digits to get there. But, from a low of 1.381, we’re now up to 1.386.
The high point for the rate was in the third quarter of 1981, when it reached 3.5 and the country was not only awash in paper dollars, but people were passing them around at an increasing rate. Couldn’t have that, could we? Somebody had to put on the brakes. That’s why we got double digit interest rates. And, ever since, the money bags have been slowing things down.
I suspect it’s in the vain hope that, if they can just limit the supply of dollars to the hoi poloi, every dollar the money bags can snatch and stash will be worth more.
But, if the crash of 2008 has taught us anything, it should be that quantity doesn’t matter. The country supposedly “lost” forty trillion dollars in that crash, yet all our deteriorating infrastructure and our shoddy housing projects, as well as our crumbling industrial plant, pretty much survived. I mean, it wasn’t as if, like the cradle of civilization, the U.S. had been bombed back into the stone age. Right?
Money, is a figment of the imagination. So are the letters (symbols) I used to “write” what you are reading. How many symbols I use to get my ideas across has some importance. If I used none and all the visitors to the internet were illiterate, like the people who come to feast on “dirty” pictures, or even pictures of dirt, then the number of letters I use, or don’t use, would be truly insignificant (not visible). The same is true of dollars (symbols of debt, aka IOUs) that aren’t spent, i.e. handed around to someone else. On the other hand, the more people that get their hands on that one dollar in a given amount of time, just as the number of people that read and “get” my message, determines the value.
So, the dollar becoming less sluggish is good news.
Of course, dollars that are sent from the Treasury to individual pensioners or orphans or the physically handicapped get passed around at a goodly rate. Those people know what to do with money; that money is to be spent. Congress, on the other hand, even though it is in charge of the currency’s initial distribution doesn’t appreciate ordinary folk doing their work for them.
Because Congress doesn’t appreciate ordinary folk. Congress, for whatever reason, has turned into a cadre of bad servants, who resent having been hired to work. They have a job and they don’t want to do it. So, somebody else needs to be coerced and sequestering the wherewithal that’s necessary in the modern world to complete our transactions is how they’ve been putting the squeeze on the rest of us.
Now the electorate seems to have got their number and sent in more replacements. (Before 2014, 212 incumbents in the House had been replaced, but without significant effect). Besides, the President did say he’d have to act on his own, if Congress doesn’t get down to work by providing both funds and directions. We should not be surprised that the voters took him at his word.
“Six of one, half dozen of the other.” This time around it wasn’t even possible to distinguish Republicans from Democrats.
Message to Washington: “If you’re serious about doing your job, show us the money.” Get rid of that sequester and get Wall Street to empty the vaults by setting the tax high enough to make the dollars come back (that’s what revenue means) at a goodly rate. After all, that’s what federal taxes are for–to recycle the bucks.
If we don’t recycle, we just have to keep issuing more. Dollars in bank vaults are about as worthless is those bags of aluminum cans in the neighbor’s back yard.