Tuesday, 06 July 2010
Lay out in front of you a penny, nickel, dime, quarter, & a half-dollar. Look closely at them and see if you can discover any differences, besides the value, color and size. See anything? ˙op sɹǝɥʇo ǝɥʇ ǝʞıl ǝpıs ǝɥʇ uo sǝʌooɹƃ ǝʌɐɥ ʇou op lǝʞɔıu puɐ ʎuuǝd ǝɥʇ! You must flip your computer screen upside down to read that, so I will wait to go on................... Ready now? Ok, the grooves on the coins are called "reeding" and if you look closely you will notice that there is copper sandwiched between a nickel-zinc metal. These are called clad coins. Before 1965, these coins were not clad, but were made of 900 fine silver (90% pure). You will notice that none of your dimes, quarters or halves are dated before 1965. That's because of inflation and recession. You probably didn't know that all of these "coins" you are looking at are not really "coins". They are called tokens. A "coin" is a disk of precious metal, like gold or silver.
The Roman government had problems 20 centuries ago and the Greeks had problems 5 centuries before the Romans, so inflation and recession is no new thing. A welfare program is the practice of giving things to poor people. Modern governments also have welfare for rich folks, but it is called "subsidy". If you are poor, the gov't gives you food, money, medical care, or housing, that's welfare. If you are a rich person or a big corporation, and the gov't gives you land, money, or buildings, that's a subsidy. A law of economics is a fact of life. It's something you have to live with because you cannot change it.
The law the Romans ran into was a big one. It's slang name is tanstaafl (tans-t-awful), which means "There Ain't No Such Thing AsA Free Lunch. Tanstaafl means that nothing of value is free. Someone must pay for it, if not with money, then with time and hard work. (Just an insert here.....this means they ain't no such thing as free health care, either!!!). Tanstaafl was a popular saying during the Great Depression, and it's becoming popular again. Now the Roman gov't wanted tools, land, and gravel for it's roads, and it had to pay for those things. It wanted horses and weapons for its soldiers to fight wars and it had to pay for them. They needed lots of money! And the way to get the money was to tax the people. Taxing means taking money, by force if necessary, and that's what the Roman gov't did. (Sound familiar today?) The Roman gov't soon learned a very unpleasant fact: when taxes get too high, people get mad enough to revolt and overthrow the gov't - as the colonists did during the American Revolution. The gov't realized that they could not raise taxes again, but they still needed the money. Now what? The solution? Counterfeiting - making phony money. The way to counterfeit money is to use the printing press. But 20 centuries ago the press was not yet invented. All the money was metal coins, and the gov't had to make phony coins. The main coin was a denarius, which was 94% silver. The gov't started "clipping" the coins. Clipping mean shaving off the edges. The shavings from the clipped coins were used to mint new coins. The gov't then had the clipped coins, plus the new ones. It had a lot more money to spend. The Roman people were not stupid. They started to realize that their coins were getting smaller and lighter and some of the silver was missing. They began to refuse the clipped coins (like a baker would refuse this coin from a customer that wanted to buy bread), or they would require 2 coins instead. In later centuries, people developed an easy way to tell if a coins was clipped. They had notches cut into the edges of the coins (reeding). Any clipped coin was very recognizable after that. The dimes, quarters and half-dollars are still reeded today, to still look like silver coins, but they are not. These coins still contained precious metals up until 1965. Base-metal coins, like the pennies and nickels are not reeded because no one ever clips them.
The gov't had to come up with a new system of counterfeiting. So when a denarius was brought into the treasury it would be melted down and some base-metal added in. It then was only 84% silver. This went on for many years and was called "debasing" the money. Your half-dollar was 90% percent silver in 1964, but today it has no silver in it at all!. The Roman people knew that the money was losing it's value, so whenever they had a coin with alot of silver in it, they stashed it away and didn't spend it. That is still the situation today - people are saving their valuable coins and spending their "bad" money.
Do you know how much a trillion is? Back in 2004, the federal debt was $6.783 trillion. Today, they say we are about 14 trillion in debt. This number is so big that it is no longer "real" to the politicians. It has become a meaningless number. But let's try to understand it. Visualize $1 million in $100 bills laid end-to-end. You would need 20 minutes to walk the length of this line of cash, for it would be about 1 mile long. Back in 2004, to walk the fed debt - you would have a line of $100 bills laid end-to-end and it would take you 228 years to walk it. It would circle the earth 240 times. If Columbus, when he stepped ashore in America, had immediately begun borrowing money at the rate of $20,000 per minute, by the year 2000, he would still not have borrowed the equivalent of the fed debt in 2004. We can only imagine how many hundreds of years we would have to walk today!! We are in a very bad situation!
The last thing we talked about was the 4 freedoms we must have to have a Capitalist ecomony. 1). Freedom to try (we have the freedom to start a business, patent an invention, etc.), 2). Freedom to buy (we can buy resourses we need to start that business, we can get loans from the bank, etc.) 3) Freedom to sell (we have free market, we can sell our product to anyone we want to) 4 ) Freedom to fail (we have no guarentee that we will succeed, but it creates opportunities, for instance, the horse and buggy industry failed because the automobiles were invented). In a communist ecomony, all these freedoms are taken from us. The gov't then makes all the choices for us.
Our support group had an end of the year presentation. Our classes presentation started out with Dave sharing some thoughts. Then each student recited a quote from a Founding Father. Then we presented the audience with a quiz about facts of the Fathers. We did a reading from a section of a skit about a Russian immigrant, recited the "Pledge Allegiance to the Christian Flag" (I pledge allegiance to the Christian flag and to the Savior for which it stands, One Savior, crucified, risen , and coming again With life and liberty for all who believe". We concluded our presentation with everyone singing "God Bless America".
This concludes our year of Civic Class. It was a fun, informative class and we enjoyed spending the time with the students.
Until next time................................