ECON 101

money.3-1024x668[1]A few days ago I was discussing the U.S. economy with one of my readers.  I tried to explain to him a new way for him to view our economy.  I thought I’d do the same for all of you.

Our economy works on a series of votes that we all make everyday.  You may not realize it but we vote every day, and we decide with our votes which companies survive or fail.  Let me begin by saying that everything in our economy and our life is determined by business.  Business runs everything.

When we go shopping we are voting for or against a company.  If we begin by purchasing gas for our car, we decide we would rather have the gas than the money in our pocket.  We make a deliberate decision that we would rather have the gas than the money.  Not only that but we decide we would rather have the gas from the station where we made the purchase rather than the station across the street.  We make this decision because of many factors, convenance, price, we like the attendant, our car seems to run better on that particular brand, etc.  The bottom line is we vote for that station and the gas is more important to us than the money in our pocket.  We may choose to not buy gas right now, and that’s a vote, too.  Our entire economy works on this principle.  All day long we make this same  decision again and again.  We vote to trade dollars in our pocket for a product, or not to make that trade.

When we make a purchase at Walmart, we are choosing to bypass Target or Macy’s or any other store.  Our decision is not just the store where we chose to do business, but we are also voting on the product.

The businesses that make the products we buy make the same decisions the consumers make.  They purchase their supplies and materials using the same criteria as the end consumer does.  The businesses vote with their dollars when they buy materials to make their products.  At the end of the day, some businesses succeed while others fail.  Those that don’t make it, did not because not enough people voted for them with their money.  It’s as simple as that.

When we go to work each day, we vote to supply our labor in exchange for dollars.  All the same rules apply.  If we decide the compensation  is not worth the labor we provide, we no longer keep the job.  Everyone has the freedom of choice to cast the votes.

Now lets look at healthcare.  The government has decided we are not capable of deciding what insurance we buy.  They have decided that they know better than the individual what coverage we should have.  For the first time, we are told we must trade dollars for insurance products.  The variety of insurance products has been greatly reduced.  The insurance companies can no longer write policies that the market wants.  The government has decided what is in the policies.  We no longer have a choice.  If we don’t buy a policy we must pay a fine to the government.  Because the young, healthy people seem to vote to pay the fine rather than spend their money on a policy, the system devised by the government will fail.  To force the young into the system, the fines will have to be raised to such a level the young will decide to enter the system.  The freedom of choice will be removed.

This is how socialism works.  America is moving away from a free economy toward socialism.  Healthcare is just the first area that government is taking over.

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