If you print up funny money and build a house with it, it's not really backed by real value.
Our currency since we went off the gold standard is in the same position. We sell treasury bonds to "back it up" but even those bonds are valueless without real collateral.
So what happens? It may have cost 150,000 to build that government built house, but because it was paid for by money with no real value-backing it's worth is now in flux. It may be worth $70,000 as soon as it hits the market.
When money has real value, it is used in such a way as to avoid waste. So a commercial builder who builds that same house, knows his market and doesn't permit waste, because he will have to absorb that loss. The result is a home that is better suited to its market, will hold it's value better and will have been built without waste.
See, that's the other factor. If value isn't created, waste almost always fills that vacuum. So for every project built on tax dollars it CREATES poverty and loss by consuming some real value somewhere!
It's like picking a pocket and stealing a twenty dollar bill from a rich guy; then exchanging it for two fives and a ten and then burning the ten dollar bill, pocketing a fiver and handing the other fiver to the guy encouraging you to pick that pocket.
That's government spending in a nutshell. It CONSUMES value.
Flame » in reply to No, you just didn't get it. Or didn't want to.
In other words...
The whole thread (32 posts)
- The economy is not consumer driven?
- Property is merely a euphemism used to justify violence. Ask the Indians.
- I see what you mean
- No, you just didn't get it. Or didn't want to.
- Barking mad
- In other words...
- No, you just didn't get it. Or didn't want to.
- "Consumers" don't buy housing.