Thursday, April 29, 2010

Seven Principles for Highly Effective Economies

Here are some ideas for strengthening the economy.

First principle: the real goal of the economy is always quality of living. Unemployment rates, productivity measures, wages, goods, and services are all aimed at improving quality of life. The value of money is always measured by how much quality of life it can buy you. So, whenever the government increases the money supply without increasing the goods and services that are available, the money-to-quality-of-life ratio increases, and the value of money decreases.

Second principle: work is the staple of the economy. Work produces everything that improves our quality of life. If work ceases, then the value of money drops. If productivity decreases, then the value of money will as well.

Third principle: the economy is and must be dynamic. It is ever changing. Government bail outs are probably a bad idea, because they slow down that change. As the population size changes, as immigrants move in, as new products, services, and technologies are developed, new businesses and operations will grow and old ones will die off.

Fourth principle: all economic transactions should, ideally, maximize the overall improvement of the quality of life. This happens naturally, because people will not usually agree to a transaction that does not benefit them. Dishonesty slows down and drains the economy because only one party benefits from the transaction, and sometimes their increase of quality of life is less than the harm they caused to somebody else, resulting in an overall drop. Unnecessary debt decreases quality of life, as do unnecessary government spending, wasteful personal spending, and so on.

Fifth principle: poorer people benefit more from the same amount of money rich people do. This does not mean that the government should always intervene. It does mean that richer people funding non-profit organizations, paying for the education of those who are less fortunate, and helping those who cannot help themselves is an economically intelligent decision for the group as a whole. According to the Bible and the revelations of The Church of Jesus Christ of Latter-day Saints, this will also allow those who have more than they need to draw closer to God and avoid hell.

Sixth principle: reasonable volunteer work makes everyone happy. When people have more time than they need, using that extra time to work to benefit others may result in a higher overall quality of living, since the poor generally benefit more from the same goods and services than the rich do, since the rich are already comfortable and have their needs met.

Seventh principle: love is more valuable than anything that money can buy. Therefore, a mother staying home to nurture her children more, or a father turning down a lucrative job that would take him away from his family, are often wiser decisions that will result in a higher quality of life for the family. A lower standard of living, in some cases, can lead to a higher quality of life.

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