Posted November 30, 2012 | comments 5 Comments

Letter to the Editor: More money in circulation creates more wealth


I enjoyed the letter by Mr. L. John Bost of Strasburg. Unfortunately, he is looking through the wrong end of the telescope. Governments need revenues (taxes and fees) in order to provide the services we have come to expect. If they do not have enough revenue, they must cut services and lay off workers, raise taxes and fees, or borrow money, or some combination thereof. If they raise taxes and fees, cut services and lay off workers, this results in less money coming in the next cycle and the downward spiral will continue. That's what is happening in Greece. (France got so fed up with the austerity program, last I heard, they elected a Socialist government instead. I have no idea how that will work out.)

We need an upward spiral instead. Ours is a consumer-driven economy. We need to get money back into the community. The more money circulates, the more wealth it creates. Government services, contracts to repair our infrastructure, improved education all put money back into the community, increasing economic activity and encouraging businesses to expand operations, thus bringing in more sales and then encouraging new hires, resulting in new tax revenues. (Obviously a tax cut alone cannot save a business enough money to meet payroll for even just one more employee.)

Gloria Rickel, Front Royal


    This special driver for Internet searches may help in locating sound economic references:


    We are actually very close to a hyper-inflation era. It should get very interesting.

    The above letter and response was brought to us thanks to home school economics classes.

    The economy and the middle class could be helped greatly if the price of gas and fuel oil could be lowered more then it has been in the last month. Also somehow allowing everyone to be able to refinance there house (mortgage) at the going interest rate, even if there house estimated worth is less then what they bought it for.

    This would probably increase spending and possibly help the economy.

      Gas prices are affected by how much money the suppliers (e.g., OPEC) want to make (manipulation); seasonal changes (summer and winter mixes); high drive periods = high demand = high prices; wells are shut down during summer for maintenance, storms, etc. = low supply = high prices. There are two ways the government can lower the price of gas. The first is by increasing supply - open all sources of energy to be developed as the market determines is most cost effective. The second is by - wait for it - lower the tax on gas. Combined federal, state, and local taxes on a gallon of gas in Virginia is 57 cents; on diesel, 69 cents. So how do we offset the loss of transportation revenue? Cut some transportation expenses. Cut other programs. The only fairness about these taxes is that the people who pay them are the people who use the service, unlike the portion of my taxes that goes to welfare.

      You can't seriously think that after the savings and loan and banking scandals that anyone is going to lend anyone more than their home is worth. I recently refinanced; could not choose the appraisal company even though I was paying for the appraisal; was not permitted to talk with the appraisers or the department of my lender that dealt with the appraiser; and after I found inaccuracies in the appraisal, I could not dispute it.

    When Professor Irwin Cory (a contemporary of Soupy Sales who was admired by George Carlin) passed away, his title of Worlds Greatest Authority was inherited by valley idiot? Why do a few cocksure loudmouth idiots try to snowball everybody else in Shenandoah Valley? Is it because Teabillies believe thumping the good book while being wrong at the top of their lungs is a virtue?


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