Modern Economics Hates You
When people are just another cell on the spreadsheet
“But without debt, how will people afford things? How will people build wealth? How will people buy what they need?”
Your home bought with debt doesn’t belong to you. It probably never will because you’ll move houses before paying it off. The car you have a payment on doesn’t belong to you. Miss a payment and it’s gone before you know it. The student debt you took on in pursuit of an education and a better job will drag you down for the rest of your life. The wealth you’ve built with loans sits atop a foundation of salt and sand and will vanish in the blink of an eye.
Because at the end of the day, you don’t benefit from debt.
The prevalence of debt and constant inflation (which I’ll get to later) is a part of a larger issue with modern economics. Contempt for the individual. In modern economics, the human being is an expendable number on a spreadsheet. What really matters are the legacy institutions. The banks, massive corporations, the petrodollar, GDP, and the Stock Market are more important. They must survive and continue on while people suffer.
When banks, corporations, and wealthy people gamble and lose they get bailed out and suffer little, if any, consequences. During the COVID-19 pandemic, people got pennies worth of stimulus. The promise of more stimulus never came.
What is one life in matters of economics?
Economists and those in charge of financial policy don’t care about your income, your savings, or whether you’re doing okay. Are you employed? Is the IRS getting its pound of flesh? And are you spending for the almighty GDP? Those are the questions that matter. That is your contribution and your benefit from the Economy. The average American could be working three jobs to say in a closet and so long as they are spending and paying taxes the political aristocrats in D.C. and the fat cats on Wall Street don’t care.
GDP
GDP is a bit of a misnomer. It’s a measurement of value through spending.
Consumption
Investments
Government Spending
Net Exports
Value is meaningless if someone isn’t spending money on it. From my understanding, Americans could simply start a recession by saving more money in cash. It’s not a measurement of how well the people of a nation are doing, it’s a measurement of how the system is doing.
There are many schemes to artificially inflate GDP. China is doing it through cheap and plentiful housing projects. Like I stated earlier, it is a numbers game. Meant to played in a dick measuring contest of national economics.
Here’s some food for thought.
That really big dip is the COVID-19 pandemic.
While people were losing their homes and jobs, the Economy and Stock Market were doing fine; The largest transfer of wealth ever occurred.
Inflation
From the 1990s to pretty recently, Japan’s economy suffered an unimaginable crisis. A horrific fate that should befall no economy.
Deflation. The value of money in people’s wallets gained value.
I know, truly horrific stuff.
The reason why legacy institutions are terrified of deflation is because of a “deflationary cycle.” A cycle in which people save money because goods might be cheaper tomorrow. Spending is “constantly deferred.” Debt is also harder to pay off. A lot of the fear behind deflation is speculation and hypotheticals because it rarely happens.
The fears behind a hypothetical deflationary cycle deny that purchases will eventually be made or that people might be able to buy more when their money goes further. Of course, constantly devaluing people’s money and making it worthless in the long run is the preferable option.
Maybe we are being lied to about the negative effects of deflation.
If you ever go looking at who benefits from inflation, you will inevitably discover that homeowners benefit. Inflation increases the value of a home. Hypothetically, people should always be trading up to a bigger and better home. Key word, hypothetically.
The problem arises when supply can’t keep up with demand, prices outpace income, and massive corporations and slum lords buy up all the housing.
So who really benefits from inflation?
Banks and other massive corporations.
If you’ve come to the end of this article believing I’m a red-blooded comrade or a Bernie bro, you are sadly mistaken. There is a more humane and individual focused way of doing economics. It can be done. It requires an overhaul of the entire way we measure macroeconomics, but it can be done.
This piece is a contribution to a larger thesis. An obvious thesis that every institution, corporate, government, nonprofit, and in some cases even personal solely exist to perpetuate the status quo. This article has gotten rather grim and poetic, and that’s largely reflective of a mental state I’ve worked myself into. Till next time, this has been Michael Vincent Hawthorne.