Thursday, July 5, 2012

Fiat Money

Money used to be a representation of the amount of resources a Country had.

In the old times (before WW2) when a government needed more money, they had to raise the taxes. Doing so affected, in a negative way, their chances to get re-elected. To counter this, they started printing more money instead of playing with the taxes (They still do … In Canada, there’s a tax on a tax(?)). The thing is, it’s still a tax only this time it’s a bit more hidden.

The taxes allowed the population to check their government. Too much taxes made the people question where the money was going. Printing more money (AKA Fiat Money) is not talked about as much as a tax and often goes unnoticed because the negative effect only appears later.

The cost of living going up is often blame on the gas price going up. Why do you think the gas price went up in the first place?

To have a government to print money in order to help the population is counter productive. What we need is a government that will say “no” to some of our demands because we simply can’t afford it (That’s right, we’re not supposed to have everything we ever wanted).

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