Cult of the Amateur: Did i really just rant about economics?

I don't fancy myself an economist. This is just stuff that has been rattling around my head for awhile. Maybe it's all lunacy, but it makes sense to me (but doesn't madness make some kind of sense to the lunatic?) Besides, i'm sure very few, if any will read this anyways, so it doesn't matter! =)

I have found the hard way many a month that spending money on credit isn't the same as not spending it. Oh, when i spend on my credit card everything looks nice. The money i set aside for savings each check remains intact, my wife thinks i spent less and i don't have to watch my checking account hover quite as close to 0 on payday eve. I feel like a generally awesome guy all-around when i do it.

However, there is a price that is paid later on. I then have to cop to it that i've been buying a little here, a little there, and now the bill is big and i have to pay. When this happens i generally have a paycheck or 2 where things are on a little more shaky financial ground. I have to pay off this big debt and then i have little left over for myself. No Chipotle. No Amazon.com.....

I think that's what we are going through in our country right now. Here's how i see a couple of the problems in our country.

First, we, as a country, have converted almost totally to what i call a Wal*Mart mentality. What is a 'Wal*Mart' mentality? I think of it as the idea that we can get stuff for cheaper than what it costs to produce. Everything has a price. Your iPad has a price, those hot dog buns have a price, your bicycle has a price.

Inflation mucks everything up because it makes that .25 cent loaf of bread 1 dollar a few years later. Inflation is, as i see it, a necessary and normal part of supply and demand, especially as a population grows in size and prosperity.

In America, however, we've decided, to some extent, that inflation doesn't exist. Or at the very least we've gone to some extreme measures to deflect it's effect. This is where Wal*Mart comes in. Everything is cheaper in Wal*Mart. They've got great prices. I say that without a trace of guile or sarcasm. Stuff is cheaper at Wal*Mart. But what is the magic?

Well, first off, there's China. I'm sure everyone's rolling his eyes right now. But seriously, China is a huge factor here. If you have to rent a factory in America to make sweaters and the factory costs 10,000 dollars a month. Well, that is before you factor in workers and such, machinery, trucks... what if you could get twice as many sweaters for half the price? You can! Just order them from China! How does this work. Well, from what i gather China has an incredibly low wage for its workers as well as a really low cost of living. This means that a person who would need 30-40K to live in the USA would probably need 3-4K (or less) in China. So, why not hire 10 Chinese workers instead of the 1 US worker? The only difference is the shipping, but that's going to still bring you out at much less than with 10 US workers... right?

Here's the rub, though. This solution is leveraged on one fact: China is cheap living. What happens when China explodes in size and prosperity? inflation... right? Once again, i'm no economist. However, it seems to me that China has to eventually have some major inflation from this huge amount of workers making money, driving up demand for stuff...etc.

The gravy train can't last forever, and i think that's what we're seeing in our country right now with the economy. Oh, there are no jobs in manufacturing? We're complaining that all our jobs are being off-shored? Uh yeah, it all goes back, in my mind, to the Wal*Mart mentality.

We want stuff cheaper, cheaper, cheaper. It all comes at a price. If we pay less for stuff, then we get paid less. If we pay someone else to do something cheaper for us, and that person isn't part of our group, then our money travels outside our group and is not longer circulated within it.

So, in the end, we really get what we pay for...

It seems pretty simple to me.... but not so much....