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Money Matters update Wednesday, November 20, 2013.
Wow, this puts things in perspective!
Marc's Notes:
The term “free market” conjures up all sort of images in people’s minds, from bad to good. Many know it for what it is: people buying and selling between themselves, arriving at an agreement much like you do when you contract a guy to paint your house or mow your lawn.
But in many the term free market spawns images of greedy corporations gouging the lesser man of his paycheck all the while making obscene profits over and above what would be deemed fair by any reasonable measure.
Truth be told the free market is nothing more then the first description: two parties agreeing to do a deal with the price set in agreement by both.
The free market may not be perfect but it is the best method for producing things in the cheapest fashion possible. If price is not agreed upon, the sale does not take place. If a monopoly exists and price gouging arises, new competitors enter the market to garner profits and the price then comes down again. Shortages and surpluses are addressed by supply and demand pressures and prices adjust accordingly.
The free market is in essence people buying and selling things as they desire. The simplest vision is to imagine a farmers market on a Saturday morning. The worlds businesses operate in much the same way except on a much grander scale.
What the free market does is produce things at the lowest possible cost, and no other method will produce an item cheaper. Because of this reality, a central government cannot by the very definition of the way a free market operates make anything more “affordable”. Since the free market produces the lowest cost, any other method produces a higher cost.
Whether a proposal by a government (such as healthcare) is adorned in fancy terms like “affordable” and under a feel-good veil of compassion, the fact remains that governments cannot make anything “more affordable”.
In fact governments are the worst administrator of programs, as there is no competition to government such as there is in every other `system` of product creation.
Just look at the businesses the government operates. Amtrak loses billions a year as does the US Postal Service. Meanwhile the military is the biggest consumer of gasoline in the world and consumes billions of dollars shuttling iron and gunpowder back and forth between the world’s ports. The list of government boondoggles goes on and on.
Government spending is badly administered by people who have no “skin” in the game. There is no competition to government to force it to spend thriftily. Government waste is a widely and accepted truth and for good reason. It has no private owners who demand profits. Government operates without a profit motive and it’s this profit motive which curtails wasteful spending in private industry. Put simply, the government could burn money and still operate. In fact it’s the only entity that can.
Government can subsidize programs but every penny it spends in subsidies must first be taken (in the form or taxes or levies) from the very population the program is trying to make affordable.
How can low rates be touted if the people first paid for those rates in previous taxes?
The very notion of “affordable’ anything administered by government and supposedly at a lower cost than the private sector is preposterous at best.
That some belief it to be so does not make it so.
America will find this reality in a few years time as the Affordable Healthcare Act unfolds. Even with subsidies, our healthcare costs will skyrocket, the quality of care will decrease and the taxes to pay for it all will further bleed the pocket books of an already struggling populace.
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Money Matters airs tomorrow, Thursday at 12:00 pm PST on KVMR.
A new SUPER DIVIDEND PAYERS LIST was posted last week.
A new Money Class is scheduled for December 3. 2013 in Grass Valley.
Discounted cost if you sign up by email now. Only $129.00 before Thanksgiving.
($199.00 after that day)
Class will be held around 11:00 am to 2:00 pm. Email me to sign up now.
Look for my new paper on “Buying Stocks on Sale or Get Paid Not to Buy Them at all!”
We will also be going over this strategy during this upcoming Money Class! Sign up and learn how!
All for now,
Marc
