Homeschooling Myself

Windmill at U.S. Botanical Garden

Dear Reader:

September. Back to school. This time of year finds me yearning to learn something, to sharpen some pencils to fine points, to crack open some new notebooks with all those blank pages bursting with possibility. The steam rising from lake in the cool mornings mixed with the scent of steam rising from my coffee cup catapults me into autumn. Once September arrives, the season turns, and I find myself casting about for continuing education.

I compulsively peruse college websites and contemplate returning to school for an advanced degree in . . . something. A MFA in creative writing? A master’s in New England studies? Paralegal courses? Business? Or maybe I should take some adult ed classes. I look and dream and try to project myself into the future, trying to spy out the terrain. Will I actually use the costly investment of time and money to make a decent return on investment? Will jobs even be available in my fields of interest? Do I really want a career, or am I simply wanting to learn something?

Until I figure out what I where and what I want to study, I will try to teach myself. Truth is, we’re all lifelong learners whether we want to be or not. Some of us chose to direct our learning in specific directions, and some of us learn by default when we pick up a magazine or click the television remote. Either way, we learn.

For instance, today I could be learning where the Real Housewives of Beverly Hills get their nails done. Or “What Not to Wear.” Or how to make Martha Stewart’s Halloween punch. Instead, I chose something different. I chose economics.

Economics is one of those subjects I missed along the way to high school diploma and college degree. Like a teenager who feels that if she only had that one magical pair of perfect jeans she’d suddenly become skinny, de-pimpled, and popular, there’s one side of me (call her Side A) that has this sneaky suspicion that if only she understood how the economy works, everything about this world that seems illogical and murky would suddenly be made clear. Of course, the other side of me (Side B) knows that is ridiculous, that there is no magic theory on this earth strong enough to provide a lucid organizing principle for everything.

Side A argues, “Yeah, but would it hurt to try? What else are we gonna do all day?”

Side B shakes her head, disgusted and cynical but eventually agrees, grudgingly, to go along with Side A’s latest folly. “As long as it doesn’t cost us anything but time.”

Side A waves a hand dismissively. “Yeah, yeah, yeah. Go find me a highlighter already. And some skinny jeans.”

Anyway, since I wasn’t going to allow myself to take expensive college courses simply for the fun of it, I needed to find a cheap alternative. Lucky for me, someone dropped off an introductory college textbook at the swap shop at the transfer station, and I snagged it up last spring. The book is called THE ECONOMIC WAY OF THINKING by Paul Heyne. Two chapters in, and I’ve already found at least ten gems. Here are a couple.

From page 4: The theories of economics, with surprisingly few exceptions, are simple extensions of the assumption that individuals take those actions they think will yield them the largest net advantage.

Heynes goes on to explain that “advantage” doesn’t always mean money. There are always other advantages besides greater monetary wealth.

From page 16: (1) Most goods are not free but can be obtained only by sacrificing something else that is also good. (2)There are substitutes for anything. (3) Intelligent choice among substitutes requires a balancing of additional costs against additional benefits.

So (1)Education isn’t free. You have to sacrifice good money and/or time in order to gain education. (2)A substitute for expensive college tuition is homeschooling myself. (3)Balancing additional costs (money) against additional benefits (maybe a paying job, maybe not), means the intelligent choice for me was picking up that used textbook at the dump.

From page 12: The primary goal of this book is to start you thinking the way economists think, in the belief that once you start, you will never stop. Economic thinking is addictive. Once you get inside some principle of economic reasoning and make it your own, opportunities to use it pop up everywhere. You begin to notice that much of what is said or written about economic and social issues is a mixture of sense and nonsense.

Yeah, this is no surprise to me. Once I get into any sort of reasoning, I begin to apply it to everything around me. My hope is that economics will bring into focus the slightly blurred edges of current events, history, politics, and social issues so that I can get a clearer picture of the world around me.

So far so good. I am devoting my early morning coffee/reading time to economics this fall. You, dear reader, will probably have to suffer through commentary about current events both personal and public as seen through the lens of economic theory.

But who knows. It might even be more entertaining than watching reality tv.

Question for you, my dear reader: What sorts of continuing education opportunities have you found since graduating from high school or college? What interests have you pursued? Do you feel you can learn on your own as effectively as you can learn from a teacher or a school? Are there any glaring gaps in your education? Drop me a line and let me know what you think of continuing education . . . Outside the Box.

Money Talks

Handknit Felted Purse

Dear Reader:

I thought it was about time to talk a little bit about money. With the holiday shopping season upon us, it might be good to remind ourselves that money doesn’t a)grow on trees b)come cheap or c)come with no strings attached. In order to get money, you either have to earn it or borrow it. If you borrow it, you have to pay it back within a certain period of time and you have to pay extra in the form of interest. A basic rule of economics is that unless you like those nasty strings and expensive interest, you shouldn’t spend more than you earn. We Americans have trouble with that concept apparently, both at the personal and the national level. It’s no secret. We are in serious debt.

The National Debt
When Bill Clinton left office in January 2000, we had managed to balance the federal budget. Oh, we still had debt, but we were no longer adding to that debt. After 9/11, however, our spending increased as we went to war in Iraq and Afghanistan. At the same time, our revenues in the form of taxes were decreased–three tax cuts were initiated even as we were increasing our military and other spending. This fiscal policy greatly increased our debt. According to the Department of Treasury, Bureau of Public Debt, on January 1, 2000 the national debt was 5.7 trillion dollars. By 2008 it had ballooned to 9.2 trillion dollars. This was during the “reign” of a supposed fiscal conservative!

Personal Debt
It’s hard to point fingers at our leaders when we are just as guilty when it comes to our own fiscal responsibility. According to Credit.com, Americans now have a revolving debt balance total of $972,494,000. While some statistics put the average credit card holder in debt of upwards of $8,000, this particular website claims that the median balance is $2,200 which really doesn’t sound all that bad. What it tells me is that if we simply bought less stuff, we could easily pay off our credit cards debt and then–gasp–maybe even begin to save some money. If we don’t begin to be fiscally responsible individually AND as a country, we are going to be in big trouble in the coming decades. Let’s talk about why.

An Informative Documentary
This morning, I watched a documentary film called I.O.U.S.A. Slanted neither to the left or right politically, this excellent film directed by Patrick Creadon explained how our country’s budgets have changed over time, the amount of debt we have taken on and when, what a balanced budget really means, how federal debt relates to Gross Domestic Product (GDP), why and how so much of our debt is owned by foreign countries (Japan, China, etc.), how the trade deficit impacts the monetary supply, the difference between fiscal policy and monetary policy, how much debt we really are in (when you count in Medicare, Medicaid, and Social Security benefits we will begin paying out as the Baby Boomers reach retirement age), and more. Click HERE to go the the I.O.U.S.A. website where you can view a 30-minute version of the film and find stats and other information of interest.

So, how did we get into this fiscal mess? Looking back at history, it seems that most of our debt has been incurred during times of war. Wars cost money. Lots of money. The War for Independence put our fledgling nation into debt right off the bat. We managed to pay down that debt. Then the Civil War plunged us into debt. We paid that down, too. World Wars I and II were huge money-suckers. The Wars in Iraq and Afghanistan are costing us hundreds of billions of dollars.

Wars are not the only debt-producers, however. In the 1930′s we spent our way out of the Great Depression by instituting social programs like Social Security, Medicare, and Medicaid. Until now, these programs have actually brought in more revenue than we’ve spent, making the fiscal deficit appear smaller than it really is. According to a treasury website, today’s debt is $11,991,506,876,413.07. But this figure does not include the Social Security, Medicare, and Medicaid dollars we actually used to help balance the budget rather than saved for when the Baby Boomers retire. According to the writers of I.O.U.S.A. if we added in the entire debt owed in 2008, the amount would be $53,000,000,000!

Stop Paying for . . . what?
Some of us believe that simply ending the wars in Iraq and Afghanistan will allow us to balance our budget, but the war is only 4.7% of our budget spending. Some of us believe that getting rid of earmarks and “pork-barrel” spending will solve the problem, but that only accounts for 1.27% of the budget. To see a pie chart of the 2009 budget, click here.

According to this chart, much of our budget is taken up by Social Security, Medicare, Medicaid, unemployment/welfare, and interest on the national debt. If you are my age (forty-ish) or younger, you probably don’t expect to ever see Social Security or Medicare benefits, but the generations ahead of us certainly do expect to keep on getting their benefits. Unemployment benefits have been pretty important for Americans who have lost their jobs to outsourcing and the scaling back of businesses due to the housing bubble in our economy. The interest owed on our debt in probably non-negotiable. Every year as our deficit increases, our debt increases, and that pesky interest obligation will take up a bigger chunk of our pie. And just imagine what the Social Security, Medicare and Medicaid portions will look like when the Boomers start retiring in earnest.

What about revenues, you ask? We must be bringing something in. Yes, you are right. Revenues come in to the federal budget through taxation–and don’t we all just love taxes? But even with what some consider a huge tax burden, the expenditures in our budget outweigh the revenues by billions of dollars. Revenues for 2009 were estimated at 2.7 trillion while expenditures were estimated at 3.1 trillion, according to stats provided by the U.S. Government printing office and posted on Wikipedia. (click here for the site.)

An Informative Book
So, if expenditures are so much greater than revenue, where does the government get the funds to cover the costs? By borrowing. The government sells bonds–more and more often to foreign governments like China–or exchanges bonds for money to be issued by the Federal Reserve. I’ve been reading about the latter in a very compelling book entitled THE WEB OF DEBT researched and written by Ellen Hodgson Brown, J.D. Click HERE to read an excerpt and learn more about the book.

Did you know the Federal Reserve Bank is not owned by the U.S. Government? I didn’t. The Fed is an independent privately-owned corporation which creates and issues money at the government’s request. The government does the printing, but the bank issues the money on credit–with interest that must be paid back. There are twelve regional Federal Reserve banks which are owned by a bunch of commercial banks. Each of these twelve regional banks own a percentage of stock in the Federal Reserve System. At the time of the books printing, New York was the largest of these and held 53%–the commercial banks that owned this New York Fed Reserve bank were Chase Manhattan, JP Morgan, and Citibank. (WEB OF DEBT, page 127.)

In any case, the U.S. government (hence, we taxpayers) asks the Federal Reserve Bank to create money that will enter the economy. The creation of money is regulated by the Fed, not the government. The government does appoint the chairperson (for many years this was Alan Greenspan) whose job it is to run the Federal Reserve System and to set the interest rates. The money the U.S. government borrows, is to be paid back, with interest, to the Federal Reserve Bank. The commercial banks who own stocks in the Fed, profit. The stockholders of the commercial banks as well as the executives of these banks, profit in the form of stock increases and bonuses. Wealth, in the form of interest, thus flows from the taxpayer to the banks to the investors in those banks. Your taxes are funneled toward rich investors via national borrowing. When those investors are foreign countries–say, China–our taxes help enrich a foreign nation whose political system may be in direct opposition to our own. This is to say nothing about our trade deficit with said countries. Isn’t this interesting?

(I’m thinking that at least with Medicare, Medicaid, Social Security, Unemployment, and Welfare at least the money goes back to Americans. If we’d just buy American-made goods, we’d keep our money right here at home where it belongs. But that’s just my opinion.)

I am only about a third of the way into this book. As I learn more, I will pass along the information, but you don’t need to take it from me. Read the book yourself. Watch the movie. Search our other sources of information. A bi-partisan group called the Concord Coalition fights hard for fiscal responsibility. Check out their website HERE.

Stop Fighting Each Other
One thing I am taking away from all this research is that all of us–liberal and conservative alike–are being used by big money, big government, and big business. I believe we are being played against one another, like pit bulls put into a ring to fight it out while the handlers profit. A pit bull only wants to eat and sleep and live his doggy life. He is forced into a fight because someone else controls him, someone who is attempting to profit off him. The “enemy” pit bull wants the same things and is put into the same position. In the end, neither the progressive nor the conservative dog wins. Each comes away bruised, ripped, and bleeding . . . or dead. Meanwhile, the handlers collect the wagers and go home smiling.

By pitting “Libertarians” against “Progressives”, the big money interests can wheel-and-deal in the shadows while we are focused on ripping and tearing into each other. We fight about government regulation, income taxes, welfare, healthcare reform, the wars on terror, drugs, and illegal immigration while all the while the bankers and the power-mongers quietly gather vast amounts of money and influence. At least, that’s how I’m beginning to see things here . . . Outside the Box.