Morning Minute 8/27/24
“What is Your ENGINE of Economic Freedom?”
The 14th amendment to our Constitution defines our “Economic Freedom.”
This amendment describes the rights to earn an honest living, plus the right to acquire, use and possess private property.
There is one invention that has created more personal economic freedom than any other: your personal vehicle…your Car, Truck, Van, or SUV!
Consider this.
150 years ago, most people lived and worked within 10 miles of home. Long distance travel was accomplished via train, boat, horse, wagon, or carriage. In 1897, the invention of the gasoline powered automobile created the ability to live and work in 2 different places, many miles apart. This invention eliminated the need to work within a few miles of home. allowing individuals to decide where they would work, AND where they would live. The economic freedom provided by the automobile opened up huge opportunities for those who wanted to be more, do more, and earn more.
Realistically, I never realized the opportunities that people gained by having a personal vehicle, until my assignment as a Finance Manager. One of the questions I asked before structuring a financing program, was inquiring how that getting a new (or newer) vehicle would change their lives. They told me of the problems they were encountering using public transportation and taxis, or depending on friends and family to take them where they needed to go. They desired the economic freedom of personal mobility…by having their own vehicle!
Think of all the many changes enabled by having personal transportation. It created suburbs away from downtowns and industrial areas. Shopping centers and malls were placed close to where people lived. Greater competition arose in service industries as people had a way to get to numerous places to shop, dine, worship, and be entertained. How many businesses today have drive-thru windows allowing you to order, pay, and receive your food, medicine, or goods without leaving your car? Your vehicle allows you to communicate hands free, navigate without a map, and be entertained without leaving your vehicle. None of this would be possible if you had…no personal vehicle.
As we consider what the future holds for us, remember that the economic freedom provided by having your own personal vehicle, may be lost if we allow government to dictate what we can own, how we may use it, and how it is powered. We must also be on guard to prevent government from taxing the usage of our vehicles based on how much we drive. That action will be as destructive as government dictating where we can live, where we can work, and whether or not we can start our own businesses.
In closing, remember the personal economic freedoms that we enjoy, by being free to travel, using our own…personal vehicle.
“What is YOUR Engine of Economic Freedom?”
That
is today’s Morning Minute.
Morning Minute 8/30/24
“INFLATION: What it Is & Why it Matters!” (part 1)
Inflation IS the increased price of goods and services from one year to the next.
There are many reasons for this. Inflation primarily occurs when government spends more than it collects. The treasury simply prints more money to cover government spending, making our money worth less. More money chasing the same number of goods and services, always creates price increases. That…is INFLATION!
Deficit spending by government IS the primary cause of inflation, and the reason why our dollars are worth less. When government passes a bill like the misnamed “Inflation Reduction Act,” which spent billions of dollars the government does not have, buying things we do not need, in order to buy votes, they simply print more money. More money chasing the same number of goods and services, creates…INFLATION.
There are other factors as well. When government increases taxes, or puts additional regulations on businesses, those expenses are passed along to the purchaser in the form of price increases. When government mandates the addition of some new safety equipment on an appliance or a car, that cost is passed along to the buyer as a price increase. Politicians tell you they are taxing obscene profits. However, the buyer ends up paying for the taxes and upgrades when they buy the item. That…is INFLATION.
Increasing costs due to inflation affect individuals and families alike. To cope, they may take on a second job, or have both adults working. They reduce shopping and eating out, and repair their current home or car instead of buying a new one. Some families even decide not to have children due to inflation. Our reaction to inflation starts with CONCERN, leading to DISGUST. And, DISGUST creates EXASPERATION, which then leads to ANGER. That…is where we are today.
To add insult to injury, our government made changes in how they calculate inflation. These changes lead to underreporting the rate of inflation. Here are some examples:
1. Instead of using actual prices for set items bought by consumers, they use estimates by “government agencies.”
2. They removed interest rate increases in calculating inflation.
3. Instead of using actual home prices, mortgage and rent payments, they employ a government calculation called OER, “Owner’s Equivalent Rent.”
There is an old saying about reporting numbers; “Figures don’t lie, but liars’ figure!” Thus, we were told that inflation in 2022 was 9% when the actual rate was 17%.
Underreporting of inflation erodes the value of savings and pensions, Plus, social security payments to retirees do not rise a fast as inflation because COLA, the cost of living adjustment, is based on under reported inflation rates. SSI payments for 2023 increased by only 8%, even though the real inflation rate in 2022…was 17%.
In part 2 of this discussion, we will discover the actions required to get INFLATION under control. We will see how that eliminating its negative effects…will benefit us all.
“INFLATION: What it Is & Why it Matters!”
That is today’s Morning Minute.
