Wednesday, May 25, 2005

The most important part,

The main word to remember in dealing with any economic system is scarcity. That means that every resource (time, money, intelligence, etc.) is limited. That's why in America if you find a $20 bill on the sidewalk you are excited; we know that $20 bills are scarce enough to not easily be found without good effort.

Germany at one time, tried printing more money to cure the national debt. As a result coined and paper money was no longer scarce, so it wouldn't have made your day if you found a $20 money piece on the sidewalk; because money at that time was easy to find and therefore not worth as much. In fact one can of beer might have cost you as much as $500!. We've learned over time that the best system to deal with the scarcity monster is Capitalism.