RE: "The problem with socialism is that you eventually run out of other people's money." - Margaret Thatcher
Actually that quote by Margeret Thatcher is completely false. In any economy you never run out of other people's money. No matter what economic model the country uses that you live in, capitalist, socialist, communist, monarchy, oligarchy, whatever you want to call it, someone always has money. It does not even matter if the economic model uses a finite currency or a fiat currency (where the supply is controlled by central banking and/or fractional reserve banking).
When you look at the mathematics of any economy it is simply people earning and spending the same money over and over again. The currency just moves in a circle from person to person as they perform labor to earn it and spend it on goods they want. As soon as a person spends money another person is earning it.
So you see it is impossible to run out of other people's money because someone is always holding money in any economy. The only thing that changes is how much each person holds at any given time.
"Money is like manure... it works best when it's spread around."
J. Paul Getty - socialist billionare oil barron.
what was(is) socialist about an oil tychoon?
wasn't he referring to the massive number of independent businesses and contractors required to drill and complete a well?
you're mistaken.
Actually he isn't completely... they keep making more money... it just loses it's value... LOL...
So you have their money still... you just can't buy anything with it... LOL
Yet that is just semantics and is NOT what Thatcher was talking about, so yeah he is wrong about that.
Perhaps it would be more correct to say, rather than that you run out of other people's money, you run out of "productive" people's money. People who actually produce value will at some point no longer accept the money in the hands of people who produce nothing and only consume (such as government and social program recipients.
Yeah, that is close to what I said at the end of this thread. I eventually said you run out of money you can GET AT.
You mean the rich... the people who amass big stacks of the stuff and thereby cripple the economy? Please explain to me why someone buying things and putting money back into the economy, is bad for the economy.
the rich MAKE the economy. Without them there IS no economy. Unless you like Somalia.
An economy is what creates rich people, you don't need rich people to have a functioning economy.
Somalia is actually a good example of how a more free market can destroy an economy/country. This is because Somalia barely has a functioning government, there is no middle class in Somalia, it is just rich and poor and the rich rule the country while the poor do whatever it takes to survive, leading to crime, theft, piracy, etc... Here is a good article about what is happening in Somalia.
https://globalinequalityandhealth.wordpress.com/2015/04/03/somalia-a-lawless-state-of-inequality/
in which the author of the very BAD , incorrect false but politically correct article states.
The top 100 billionaires of the world had accumulated $240 billion in wealth in 2012,
which is misleading...they DID accumulate....what they created the wealth didn't exist before. Then they began to distribute it. They used it to build factories, hire people and DO STUFF with it. Money doesn't do anyone any good stuffed in a mattress.
I was only sharing that so you would have a better understanding of what is happening in Somalia.
As I have explained in my previous comments, money only moves from person to person within any economy. When a person becomes wealthy all they did is move money from other people to themselves (this can be accomplished in various ways, and yes it may involve building infrastructure and hiring people). They are creating wealth for themselves but that only leaves less money in the economy for other people to earn/spend.
Yes you are correct, that is exactly what happens anytime someone accumulates wealth from the economy, it is like money being stuffed in a mattress. Because they have more money than they can spend it means there is less money within the economy for other people to earn/spend.
And that is exactly what has happened in Somalia, the rich have stuffed all their money in their mattresses.
This holds true for both an economy with a finite currency system and a fiat currency system. But you are correct, in a fiat currency system the money loses value as more currency is created by banks.
And no. Thatcher is not incorrect.
Socialism can pay for its programs by only three methods.
That's it. Also to be clear. I don't consider what the U.S. has now as Capitalism. It has many many socialist programs all over in it. It is a hybrid.
The government produces nothing but laws, waste, and wars. It thus has no product of value with which to pay for its "free" and "socialist" programs.
That cost comes from the citizens, and whatever was saved up before the socialist programs were implemented.
It becomes worse because those programs are guaranteed. I don't know of a single program anywhere in any government that once the government guaranteed it the program didn't increase steadily in cost, and decrease in quality.
They no longer have to compete to get that business. It is guaranteed. Also since it is guaranteed they keep raising the price, often in result to people complaining about quality and them saying it is due to not having enough funds. So the program increases paying...
This is unsustainable. EVERY case in the world where it has been tried at a government level this has been the case.
Now as to Capitalism itself. I like free market, and laissez faire. If the government is involved and gives favors to some and blocks others that becomes cronyism and is not a free market. I also have researched and things people complain about such as Monopolies. They are not present due to free market or laissez faire... they persist due to government collusion. (cronyism)
What you are getting into here is gov law/policies and how govs earn/spend money. Yes there are millions of possibilities and alternatives on how governments can run their countries.
What I am simply telling you is that Thatcher's statement is mathematically impossible. The money is always there in any economy and someone always has some, therefor you can never run out of other people's money.
You are correct in a fiat currency economy if the gov is run by morons who create too much debt and too much money, the money will loose value and the currency will collapse, it has happened in many countries throughout history. But that has nothing to do with Thatcher's false statement.
I think you are reading more into that statement than what the quote meant.
Sure there is other people's money. I believe what she was talking about is that you run out of other people's money that you can GET AT. Sure, it accumulates other places. Yet if that is beyond their taxation methods then it is gone as far as the socialism is concerned.
Well I have no idea what she was thinking when she made her statement, but that is my point, the money is always somewhere, other people always have money.
How a government chooses to get that money or if they want to create new money or if we want to live in a society where the few hold the majority of the currency while others cant afford to eat, that is another topic...
Basically it is the difference between a one line quote, and an essay to explain it.
How am I mistaken? It is simple math, currency just does not vanish from an economy, it just moves from person to person. That is why the quote is false, Other people in an economy always have money, therefore you can never run out of other people's money.
you are mistaken is SO many ways.
but I'll just mention one.
We're not using money any longer in our financial sysem.
It's all debt.
a dollar bill is a federal reserve note...that is...an IOU.
Yes, you are correct, that is because we live in an economy with a fiat currency system where the FED/Banks create new currency by creating debt. But that does not make me wrong, every time new debt is created new currency is created which ends up in the hands of someone in the economy. There are always other people with money, it does not matter if the money was created via debt or if the FED pushed print on their printer.
Like Zimbabwe?
Yep, there have been many currency failures throughout history https://howmuch.net/articles/greatest-economic-collapses-in-history