Where does the money go?

Of Politicians, War, and Public Debt:

"...when war comes [politicians] are both unwilling and unable to increase their [tax] revenue in proportion to the increase of their expense. They are unwilling for fear of offending the people, who, by so great and so sudden an increase of taxes, would soon be disgusted with the war [...] The facility of borrowing delivers them from the embarrassment [...] By means of borrowing they are enabled, with a very moderate increase of taxes, to raise, from year to year, money sufficient for carrying on the war, and by the practice of perpetually funding they are enabled, with the smallest possible increase of taxes [to pay the interest on the debt], to raise annually the largest possible sum of money [to fund the war].

...The return of peace, indeed, seldom relieves them from the greater part of the taxes imposed during the war. These are mortgaged for the interest of the debt contracted in order to carry it on."  Adam Smith, The Wealth of Nations, first published in 1776

Smith then goes on to say that even if money was set aside from future revenues to pay for the debts of war, it seldom actually gets used to pay down the debt. Politicians are inclined to spend the money on some other scheme that will win the favour of their constituents. Hence, interest payments rise and war debts continue to grow larger, well beyond the end of the war.

Summing up, if governments can borrow without check, then they are more likely to wage war without check, and the costs of the war spending will burden future generations, since war debts are almost never repaid by the generations that incurred them.

... never repaid by the generations that incurred them!  Two centuries later, and the practice continues.  Is this political malpractice, and are there ethical concerns?  Of course.

Does either party address the issue?

Familiar

Annoying reality -- household products we buy in bottles are about 95% water.  The price we pay is primarily for the bottle and shipping and middlemen.  And convenience; you just point and squirt.

The actual non-water content might cost a dime or two to manufacture and fit in a small packet.  Whether it is shampoo, dish soap, window cleaner, or magic-gel toilet scrubber, the part that you don't have already is tiny.

My granddaughter will appreciate this one.  :)   

So what would happen if we could buy little packets for all those things?  Would it make a difference in plastic consumption and waste?  Would it lower our home costs?  Would it really annoy some big businesses?  Of course.

BUT, it would be terribly inconvenient. You'd have to open the packet and put it in a bottle of water.  (Actually, that's where the industry started; with 'labor-saving' solutions.)

Just because it's familiar doesn't mean it's a good solution or even intelligent, and that applies rather broadly in our lives.  Consumerist norms are a play for money and little else.  Can we find a better path? Yes, and it's more fun that way.

The cost of rocket science

Tuition costs have not followed the economic norms.  They have skyrocketed.  Curious?

Regular folks are distressed by stagnant wages and rising costs.  At the top of their recent list of concerns ... healthcare -- it is huge and rising. Today, it still costs more than most can manage easily.  That's a deadly problem that affects the bottom 80% or so of Americans by income, but it's perhaps not the largest problem for many.






The rise in tuition costs is about twice what we've seen for healthcare.  In today's economy, higher education is considered an essential for success, an essential for a way forward, and as such, it is a great venue for predatory lending practices.  As an unintended result of easy money made available by student loan programs, educational institutions are free to raise fees to whatever they like since the government has arranged to finance it for them.  That's the way it has worked for years.

The explosion of education debt has gone virtually unremarked, primarily because it's deferred rather than a cost like healthcare which one must pay today.  That's our banking industry for you.

Many of today's graduates begin their life after school with a debt that will encumber them for a decade or more. Most will have difficulty making payments.  Delinquencies and defaults will be higher than for other debt instruments.

The damage?  A large portion of indebted students will be narrowly constrained for part or all of their career years.  Life will be focused on obligation rather than opportunity, on income instead of life goals and vision.  As seems common with such initiatives, profit is extracted from consumers without equal benefit or value being provided in return.

Indebted former students down the income scale are of course affected more.  The burden may adversely affect the entire life of the borrower.

The student loan program appears to be unimpressive when evaluated for ROI.  Not one benefit has been identified that could not otherwise have been achieved with less downside.

The alternatives are myriad.  If all else fails, employing post-HS students for a couple of years in AmeriCorps doing service projects is a great foundation for education.  Americorp, like the military, has education assistance benefits that could offset the need for a loan.

Fortunately, higher education is now being forced to evolve.  Technology and demand are rendering the traditional campus and curriculum as less valuable with each passing year, innovation, alternative method, and measurement.

The high cost to children of growing up wealthy

While typical in the developed world, this is not normal.

A mom was fixing supper, so I offered to pick up some things at the grocery store.  Her kids went with me, and I was surprised to discover that the youngest, a 3rd grader, had never been in a grocery store before.  She ran around the store wide-eyed and excited while we got some chicken out of the refrigerator section and some peppers off the shelf.  At the checkout, she came hesitantly and asked me so sweetly if she could have this bar of soap she'd found in the beauty section. It smelled pretty and she'd never in her life had anything so nice.  Of course you may.  It was some time ago, but I still remember the wonderment and smiles.

This is normal, the really nice version.

This is the capital city's new marketplace.  It used to be out in the sunshine and on the ground.
Here you can buy produce (bottom floor), and second hand clothes (upper balconies),
and some other household things; mostly local stuff.  Tomatoes, cassava, okra,
seven kinds of bananas, mangoes, jaque fruit, breadfruit,
coconut everything, and fish caught this morning.  I
took this picture just a few months after the
grand opening.

The store where I took the kids was small, perhaps the size of a 7-11, and it was one of just three such stores in the small west-African country.  Shopping for most folks was at roadside kiosks and in the open market on the edge of town.  Only rich people went to stores.

So my wife and I were at the grocery store today (like the one in the top picture), and as we walked the aisles filled with incredible variety and quantity, I was reminded of my little friend and her bar of soap.  And we think we're normal.

Half of the world lives on perhaps $5 per day or less.  That's one tenth of the developed world average.  Poverty is persistent and troublesome, and economic inequality is increasing rather rapidly around the world. Grocery stores perhaps are not the norm.  As the national and international marketplace is reshaped by big businesses and international trade policies, the rich are doing quite well but at the expense of everyone else. This distribution of wealth and resources has nothing to do with intellect, level of effort, or diligence, of course.

Roadside clothing merchant, some new, some second-hand, all
reasonably priced.  This is normal.

Most folks in the developed countries have no idea that they are the ones who are extraordinarily wealthy.  House and car, heating and air conditioning, schools and stores and doctors, they think that all those things are normal.  They could be, they should be, but they're not.

Djibouti, eastern Africa -- there are grocery stores in
the capital city, but they're pricey.  Street markets 
like this are the norm for most.

Apparently, wealth corrupts.

Our young African friends are socially and intellectually healthier than their counterparts in the developed world.  They have only limited exposure to our media.  Their African community does well watching over children as they run rather freely wherever they please. Children are safe, cross-generationally connected, communicative, and meaningfully related.  Unlike children in the developed world, they are not socially constrained to their grade level, and children of all ages walk to and from school together and play together.  They are perhaps emotionally healthier than children in the cities of the developed world, and they are not enslaved to fashion or obsessed with having things.

They knew I was coming to visit, so they bought fish to serve.  
This is a normal kitchen for 2.5 billion folks.

(Their difficulties are getting a balanced diet, a complete education, and healthcare when they need it.  Many of them are under height for age and underweight for height -- stunted, so they'll have health problems.  Their government is perhaps less corrupt than ours.)

Wealth in the west has spawned an economic war where the goal of business is to get more and to do so by competing and winning.  The resulting economic inequality is stunning, and we have evolved a culture where materialistic goals have replaced character and virtue and courageous service.  Fortunately, there is a better path available for our children.

The high cost?  Of growing up wealthy? ... it's perhaps a broken understanding of what's worthwhile and perhaps what's normal as well.

With wealth, one can focus on having and getting more as though that were somehow beneficial or important.  Wealth drives wedges between people; it can crowd in and replace the good parts of life, the meaningful interaction between family members and with friends. Technology and media do that, do they not?  Instead of hours spent together, there are hours spent in solo focus on entertainment things, commercialized and blinged to entice and engage our minds in a materialistic context.  No benefit except to businesses.  

A child raised in western culture and allowed to follow their educational and cultural norms is likely to grow up to be materialistic, intellectually narrow, and unaware of the real world.  True?


Unfortunately, yes.  

Is there a cure?  Yes.  For Adults?  Yes, but it's difficult.
Despite the extraordinary blessings of living in a developed economy, there is a downside that must be overcome if we want to hold on to what is worthwhile.

You might appreciate Psychology Today - The Problem With Rich Kids 

Normal and Natural

Western culture is neither normal nor natural.

Normal and natural are the relatively calm, low-level elements of existence, things just one step up from nothing and that persist as people come and go, as animals and plants live and spread, and as the years pass. It's durable, right up until when things change.

As recently as a century ago, most of us were farmers, and we had skills.  We could grow our own food, tend our own herds, manage our own homes for warmth and water and cooking.  We could build a barn or fix a roof if we needed to.  Today, however, we're specialized.

As our civilization became more complex, we spawned specializations to enhance our productivity.  Assemblers and installers, builders and bankers, paper pushers and plumbers, truckers and tech specialists.  It's a trade-off.  If a techie wants a potato, it's a trade with some potato corporation via a couple of intermediaries and transporters, and 'money' is the exchange medium.  If anything went wrong, the techie would likely have to do without.

With increasing complexity and interdependence, we've added a measure of fragility to our civilization.  Most modern folks wouldn't know what to do if the electricity went off for a month or two.  Or if the water supply shut down.  Or if gasoline supplies were temporarily exhausted.  Again.

So should we position ourselves differently?  Should we prep for change? Should we broaden our skills?  What would be a good mix?  And should our children prepare differently for life perhaps than we did?

We can't serve God

... and wealth.

You're nuts if you try.  Any attempt to do so is perhaps entertaining to an outside observer, but it's a guaranteed life of mental conflict.  (Cognitive dissonance, self-deception)

Among the fun questions one might reasonably consider today, ...

What are the chances your thinking might be bent by wealth.     ?

What is the likelihood you're balanced in your view of yourself and the world.     ?

As one of the world's wealthiest people (top 10% anyway), what might possibly be odd in your thinking about things and excess and luxury.     ?

Don't be shaped by the world; rather be changed, transformed ...

If you were to start over from where you are today and rebuild everything in your life and your children's lives, would you change anything?  Should you?

Fun questions.

Attempting a Christian life in a wealthy culture may not be convenient.  Does that make a difference?

If it does, were fake, of course. 

Things have changed, and we've been dragged along.  What's next?