Introduction
“It is a lot harder to create income and wealth than it is to spend it.” -Will Luden. We all know that from our daily lives, e.g., which is harder; earning and saving money for vacation, or spending it while on vacation? And this observation about earning and spending lines up nicely with common sense.
The Golden Goose is our American capitalist economy, an economy that is by far the largest and most successful in the history of history. Hundreds of millions of people over 300 years worked long and hard to have created this robust income and growing wealth. COVID-19 is causing two massive spending-related responses, one more worrisome than the other:
The approved and planned spending bills have either sanctioned or contemplated everything from free money, including direct cash payments and indirect money through rent and mortgage deferrals, and suspensions of loan repayments, to almost everyone in the US, with a couple trillion or so for businesses.
The House is working hard to hold up COVID response money to push its agenda of medicare for all, free tuition at public colleges, and additional financial help for those it deems needy as time goes by.
It took hundreds of millions of hard working Americans 300+ years to create this wealth; at the hands of certain politicians and political groups, all of this achievement could start to crumble in a few short years.
Today’s Key Point: We cannot do all of the enacted and contemplated COVID-related spending, or even come close to that amount of spending, without killing the Golden Goose.
That is the subject of today’s 10-minute episode.
Continuing
Fighting COVID has been likened to fighting a war. Let’s look at life in the US during WWII.
Service members did not sign up for a fixed time commitment; they signed up for the “duration of the war.”
Of those service members; 407K died, and 672K were wounded.
Civilians:
You needed a government-issued ration book for almost everything. And you had to register your tires with the authorities.
To get classification and rationing stamps, you had to appear before a local War Price and Rationing Board which reported to the feds. Each person in a household received a ration book, including babies and small children who qualified for canned milk not available to others. To receive a gasoline ration card, often restricted to 3 gallons a week, a person had to certify a need for gasoline and ownership of no more than five tires. All tires in excess of five per driver were confiscated by the government due to rubber shortages.
Sugar was the first consumer commodity rationed, with all sales halted in April of 1942 and resumed in May, with a ration of 1/2 pound per person per week, half of normal consumption. Bakeries, ice cream makers, and other commercial users received rations of about 70% of normal usage. Coffee was rationed nationally in November 1942, cut to 1 pound every five weeks, about half of normal consumption, in part because of German U-boat attacks on shipping from Brazil.
As of March 1942, dog food could no longer be sold in tin cans, and manufacturers switched to dehydrated versions. Starting in April of 1942, anyone wishing to purchase a new toothpaste tube, then made from metal, had to turn in an empty one.
By June 1942 companies also stopped manufacturing metal office furniture, radios, television sets, phonographs, refrigerators, vacuum cleaners, washing machines, and sewing machines for civilians.
Note that people still had to pay for what they wanted; having a valid coupon for, say, gas, in your ration book did not get you the gas. It simply allowed you to buy it. Today, in the COVID days, hoarders are the ones forcing rationing,