Where does money come from?

If you want to get rich, you have to know where money comes from.  Unfortunately the answer is most accurately from someone else.

When you get paid a wage, it comes out of your company’s earnings.  Your company is trying to increase earnings from taking money out of their competitors pocket, or by selling goods or services to someone just like you.  In other words, you spend, and get that money back by working, and it is all simply a massive and complex system of money changing hands.  Money is not being created, it just moves around.

So next time you think giving tax cuts to “job creators” is a good idea, keep in mind you are putting money in their pockets, and that money has to come from somewhere.

You say, “well the government is wasting money, so let’s reduce fraud and waste and turn that savings into a tax cut.”  OK, good idea, except that medical con man who is defrauding Medicare will now be broke, and an honest person will have a crack at that money.  Not a bad thing.  But that isn’t money creation.  That too is just shuffling money from one hand to another.  Meanwhile, isn’t that con man employing people?  Or isn’t he spending that money that ends up buying goods and services – like a restaurant meal that keeps waiters employed, who keep their landlords in business with their rent, who use that money to put their kids through college, who use that money to pay professors, who use that money…..  I could go on….. but the question is – where is the new money coming from?  Where is the creation of money?  Where is the increased productivity?  We depleted a crook’s bank account, and gave it to an honest person, but we didn’t create anything.

Productivity – that’s the answer isn’t it?  Yes, we gained wealth when we were able to build machines that did the work of 10 workers.  Or rather, whoever employed those machines built wealth, because surely the 9 workers who got laid off didn’t benefit from that machine, did they?

So let’s take this to an extreme.  If robots could be made to do all possible work on the planet – from cooking and cleaning, to growing food, to teaching our kids, serving food at restaurants, policing our population AND we created an unlimited fuel source  – what work would any of us need to do?  Would we even need money?  This crazy idea out of no where in this article is to get you to realize that we are part way there – and we no longer need the workers that we used to need.  That is why there can be so many unemployed, and yet it feels to most of us that life is better.

Oh wait, you’re not one of those who has a piece of the money that is floating around the planet?  Well, where does the money come from?  It comes out of the pockets of others.  And right now there are vast sums of money sitting in rich people’s bank accounts doing nothing.  They are living in massive houses, spending on anything they please, while 1 in 6 American’s are living in poverty.

There is a lot of talk of “class warfare” and “wealth distribution”.  That is because 65% of American’s don’t even have $1,000 in savings.  And when they start complaining, the wealthy, who have engineered the greatest heist in history over the past 40 years – via class warfare, and redistributing wealth – hear those complaints – they trick you into believing that YOU are the problem.  That it isn’t fair to complain since you have just as much chance as they do of becoming rich.  But do you?  In many senses you do – you can work hard, come up with a brilliant money-making idea, start a company, and so on.  But when you do those things, that money has to come from somewhere.  You are not creating new money and new wealth. Wealth is getting re-distributed all of the time.

Unfortunately, most American’s are broke because the rich have spent 40 years getting richer – and you didn’t notice it because they did it via credit, or debt.  You got credit cards, student loans and mortgages – and got to pay for everything you wanted.  Bubbles were created and you borrowed more to speculate on the asset bubbles because you thought you could get even richer.  But all you did was take all of your savings, all of your earnings, and dedicate them to paying off your mounting debt.  And the rich – those are the guys that profited from bank fees and interest payments, and who you now owe that money too.

So now we have a nation of “debt serfs” with a small elite class who own the vast majority of wealth in our nation.  You are now obligated to pay them for years to come.  You use to be a wage-slave.  Now you are a wage AND debt-slave.  Clever, isn’t it.  They say you too can get rich – but they have locked you into a debt-trap.  Now you have to pay down your debt, start saving, find a way to climb the corporate ladder, or come up with a brilliant money making idea.  All great goals that you absolutely should undertake.  But where is that money going to come from?  From the 65% who don’t have $1,000 to their name?  From the other debt-slaves?

Where does money comes from when only a small percentage of the population has money?

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