Yesterday’s posts contain the names of US Senators who spoke in support of the Bailout package passed by the Senate yesterday.
But not all of them. Those are the senators who justified their vote…who excused a deliberate and intentional descent into socialism…by saying something MUST BE DONE to keep the flow of credit alive.
Let us, for a minute, consider the nature of debt. What, precisely, is debt?
Several dictionaries define debt as An action, state of mind, or object one has an obligation to perform for another, adopt toward another, or give to another; The state or condition of owing something to another; Money that one person or entity owes or is required to pay to another, generally as a result of a loan
Wealth…that is, value, or money as a store of it, is the result of work. It is the result of production. The Man who gives the efforts of his mind or body to create a product, service a product, produce a product, or deliver a product is WORKING. In exchange for doing work, he demands compensation. his work has value, and he gives it in exchange for something of equal value. Money…or wealth.
Why? What is the purpose of money? Why have a store of value (whether or not our current fiat currency satisfies that definition is a discussion for another day)? If man’s work creates, produces, services, delivers, or otherwise provides things of value, why does He need money to store value?
Simple…He needs a method by which he can exchange value for other value. His work…it has value. His product…it has value. But he wants or needs other things of value. He can produce, say, an apple…but he needs milk.
Could he exchange an apple for some milk? Certainly…presuming the man with milk wants or values an apple. But what if he does not? he’s quite willing to exchange his excess milk for value equal to the work which produced it…but he does not want an apple. The owner of the apple is quite willing to exchange his apple for something of a value equal to that work which created the apple…but his apple is not valued by his market. What now?
Enter money as a tool of exchange. Its fundamental purpose…its reason for existence…is as a STORE OF VALUE. It is, if you will, the “concept of value” made physical, tangible, and real. The Man with the apple may now deal with ANY market that desires an appple…regardless of whether they have milk to offer in return. They may offer him MONEY…physical value…which he may then offer to the owner of the apple.
That is the nature of money. It is the tool by which men may trade the VALUE created by their WORK.
So what about debt?
Debt seeks, quite simply, to remove the necessity to create value…to, quite literally, as Rand put it, MAKE MONEY.
It is a tool by which a man with NOTHING to offer except the PROMISE of FUTURE work may claim to be offering value for value…when in fact, what he is doing, is offering a PROMISE for value. He is saying, to the man with milk, “I have nothing of value to anyone. I own nothing. I desire your apple. If you give it to me, I promise I will, in the future, create value, and give it to you.”
Think about what this simple transaction has done.
It has asked the man who produced…the man who holds something of value…to exchange it for nothing.
It has asked the debtor…the man with nothing but a promise of future value…to give up the ownership of his work. His work, and the product of it, now no longer belong to him. The apple producer now has claim.
Morally, this can NOT, in any sense of the word, be right.
Time and time again, we have been told this week that our economy runs on credit. That without a bailout, you will be unable to obtain a car loan, credit for Christmas shopping, student loans, you name it. Observe that EVERY single thing the supporters of the bailout have threatened you with…EVERY SINGLE CALAMITY they have foreseen is BASED ON DEBT.
They’re right. Our economy is based on debt.
Where they’re wrong is in insisting that this is just and moral, and should be continued at all costs. Indeed, they propose not only to shore up the insanity of debt, but to do so WITH MORE DEBT.
Perhaps you’ve been there…perhaps you’re there now. Debt hell. heard of it? Know it? I do. See if this sounds familiar…
You finance..oh…a car. Your first car. You learn the joy of WANTING, without needing to EARN…with no need to produce FIRST…and having your wants fulfilled with the stroke of a pen. It seems a small price…you’re not giving up your life, merely the product of it…and a small percentage of that.
Sure, you understand that the bank owns the car…but do you understand that the bank now also owns YOUR LIFE? What is your life? What value does it have beyond that value you create with it? But that value you create with it is now owned BY THE BANK.
No matter…it’s only a small part of it. Soon, because your car loan and regular payments have enhanced your “credit rating”, pre-approved credit card offers arrive. How wonderful! You can add a new stereo to the new car, AND replace your aging television!
More of your life, signed away at the stroke of a pen.
Soon, it seems you never have any money. You never have any tangible store of value around. Why? Simple…YOU’VE PROMISED ALL OF YOUR VALUE TO OTHERS. You don’t hold any money, because the moment you make it, its RIGHTFUL OWNER claims it!
What now?
More debt, of course. You have to eat, right? Well, there’s room on the Visa for a meal from Dominos. Congratulations…you have just financed a pizza!
Perhaps you know the end result…maybe you’ve lived it, or are doing so now, or know someone who has.
More debt incurs more debt which incurs more debt. Before long, you’re paying ridiculous interest rates because the only place that will loan you money…the money you NEED because you have none…is the payday lending place down the road.
It will end. It has to. There will come a day you have nothing left to offer…even in promise. You can not promise another minute of your life, not even for a gallon of milk…because your life is completely owned by others.
Look around. Look at our nation. Look at our nearly $10 TRILLION (let me write that out. That’s $10,000,000,000,000) national DEBT. Look at our government BORROWING to fund the social programs that serve the morality of need=claim. Look at the value of our dollar, backed by nothing but the ‘full faith and CREDIT’ of our nation.
Listen to your congressmen tell you this bailout is necessary because WE ARE A NATION OF DEBT.
And ask yourself…what does our government produce? It has made promises of future value! THAT IS WHAT DEBT IS! Where is this value? Where are the apples, the milk, the cars, the computers, the steel it produces?
They are YOURS. YOU produce them. CITIZENS produce them.
The government lives on debt. It ENCOURAGES you to do so. And the promises it makes to incur that debt?
THE SAME VALUE YOU HAVE PROMISED TO OTHERS TO INCUR YOURS.
Your life. Your work. Your production.
The bailout, ladies and gentlemen, is an ever more desperate grasp at something…anything…to sustain that which is UNSUSTAINABLE…a life spent in debt to others. It’s the trip to the payday advance place.
Eventually, it has to end. Eventually, all Men must deal with other Men in the only moral and fair way Men can trade. Not need for value…not promises for value…not want for value….but VALUE FOR VALUE.
The longer a Man takes to realize this, the more difficult it becomes to achieve it.
What makes us think it is any different for nations?