On Economics

I was debating in my own mind if I would write about this, only because my knowledge on the matter is rather limited (and quite a departure from the last topic).

It's no surprise to anyone that economics is front and center in the news. On the surface it's not exactly the most sexy topic to talk or write about...for that matter, once you dig deeper, it's a pretty ugly situation. Part of my job is to pour over spreed sheets to try and make sense of the numbers, and to see if there is any knowledge to be gained to help us make right decisions in the future. It's a small business, and compared to many, it's pretty simple, or so it should be. But even in a business of our size, sometimes the details of who gets paid, when and how, can be a little stressful...to say the least.

Seeing as I digest an unhealthy amount of news media every day, and given the financial melt down we are told we are in, I have come to understand a little bit more about our financial system in this country. Two things immediately come to mind. First, as a small business, operating on primarily a cash basis, we are in better standing than many large companies with all their glitz and glamor. It turns out, that aside from the large investment firms of wall street (many of which do not exist anymore), many of the companies that provide our goods and services every day, rely heavily on credit to meet their day to day operating needs. It goes as such. Company X has 15000 employees that need to paid on Friday, they have money coming in that following Monday that would cover the liability, but not on Friday. So Company X calls Lender Y to borrow the money they need for payroll, promising to pay it back essentially the next business day. This apparently is normal everyday practices for companies of a certain size. Many people may realize this already, I could be part of a very small minority in the dark about this, but I think not.

Second thing that comes to mind: eventually only bad things can happen in this system. They might, might be able to put a band aide on this that will hold for a while, but I simply cannot see how building a economy based on debt is ever a good thing. We owe many countries a lot of money, and it is in the interests of those countries to keep us in business and buying their goods, but there is a ceiling to that system, and whether we have reached that ceiling yet or not is debatable.