Government - #101 - #12 What is "money" and what does it "do"?

It seems that “money” really is the root of some evil!”
Some say that “money” is a major cause of misunderstanding and family breakup.
At the very least, it is obvious that “money” is a major influence in our lives.

Sounds simple? … But what is “money”, really?
Suppose we said that money represents goods and services that can be had at any time in the future.
Still sounds simple?

What if I print more “money” and there is no increase in the amount of goods and services I can get in the future? …It’s another word for “Inflation”!!! …. more “money” but no more goods and services!
Getting more complicated, isn’t it?

What if I print more money and there is an increase in the amount of goods and services in the future?
Who can measure the amounts of goods and services at any time, much less the increase in the total amount in a given period of time? How do you do that? How do you get an accurate figure?
Could there be an advantage in stating that the reason you are going to print more “money” is that “you” have discovered an increase in the total amount of goods and services? You could arbitrarily increase the amounts of currency to boost commercial business activity and make it “look like” you have a successful economy. Until the “money using” public got wise, you could “fake” economic recovery for a while; but then…… ??

So the amount of “currency” printed must be monitored so that there is “always” a balance between the amount of goods and services available and the amount of “currency” available!
Simple? … But wait…..

What about borrowing money by issuing a piece of paper which says “We, your Government, will guarantee you 6% annual interest for the next ten years on the amount of currency you give us now”. This is simple a piece of paper, guaranteed by the your Government, that is not “currency”, is not “money”. It’s called a “Bond”! But the government now has your currency, your “money” for the next ten years, to pay for expenses, without changing the volume of goods and services available. Isn’t that also “inflation”? By the way, who do you think is going to pay this magical 6% annual interest? The Government is not in business. It doesn’t produce anything. Its income is from “YOU”, in taxes!!

Who keeps track of the Government borrowing? How is it related to the printing of “money”? Who keeps track of the balance between these two items and the total volume of goods and services at any one given time?? …. Pretty scary stuff!!!
Yeah, but what’s this “keeping track of” business? How do you do that?

It’s called accounting. It’s called “budgets”. It’s called accounting “principles!
It has been proven that you can take the same set of business figures and give them to the top accounting firms and get different answers. Some even may show a loss where others show a profit! Yet, each is figured according to acceptable accounting “principles”. What do I do with the money I spent for a bridge. Do I take it all as an expense this year. The bridge has a life span of 10 years, 20, 30, 50? Which do I choose? Do I take 1/10, 1/20, 1/30, or 1/50 of the total cost and apply it as an expense this year. Who determines that?
I can look much better if I only spent 1/50 th. of the total bridge cost this year. Look how little I spent!! Look how low my expenses are now! Why we even have money left over to buy a small park! …. Oh boy!

So… not so simple!!

Who does the so-called “accounting”? Who makes these decisions? What do the present numbers really mean? If my expenses go up, I need more money … higher taxes! If my expenses seem to go down I have a so-called “ budget surplus”. We, either, can spend more; or, pay off our debts (the National Debt), or, we can lower taxes. Yeah but, whose doing the “accounting”! How good are the “real” numbers?

So all this has to do with the definition of “money”.

All “money” can really buy is “Time”!!
“Time” to make choices.
Money doesn’t “make choices”, but “time” to make choices. If you make the wrong choices, that’s your problem; but at least, with money, you are not forced into making a “choice”, you have “time”.
If you choose wisely, for you, you have the advantages of “money”. If you choose badly …..!!!!
If you waste your assets on temporary acquisitions (material things) then you might not have the “time” to make more important choices in the future. This is called “Saving for a rainy day!”

It’s always “choices”!! …… “Time” available to make a “choice”!

That’s what “money” can do!!!