DEFINITION OF “ECONOMIC PHILOSOPHY”
The word, “economy”, means the management of money. It began with money management in the household, then it grew to governments, etc.
“Philosophy” is a word that means a description of living, why things go up and down and how to explain life.
When you couple the 2 words together, you get “economic philosophy,” which would mean an explanation of how to best manage finances, the philosophy being what a person or group feels is right.
In truth, “economy” is not spending more than you make. It is now fashionable to spend way more than you make and that shows itself in credit cards.
ECONOMIC PHILOSOPHY AND CREDIT CARD SPECULATION
Here’s how it works with credit cards – you don’t have the $2,000 to buy the new furniture, so you put it on your credit card. The monthly payments are made and your whole economic philosophy is based on the fact that you can keep up the monthly payments. That’s speculation because you are hoping that everything in the world will continue to go as it has been going.
However, then you have a pay cut, or a medical condition or even divorce. Something happens that throws off your certainty that all will continue to be good.
“Sensible economy” would mean that you don’t spend money until you actually get it in your hands.
There is a lot of economic philosophy out there that, as you can clearly see, is not sound, sensible philosophy, but one based on profits for the business and some corny idea that if we provide a way for people to spend more money than they make by charging it to their credit card, then the economy will be better and people will have more jobs and on and on.
Well, you just look around and see how well that “philosophy” is working and see that it isn’t. Then there’s confusion on what should really be done about the economy and then there’s new philosophy on top of the old one and the lies just get built up.
SUCCESSFUL ECONOMIC TRUTH
The truth of any successful economy is to spend less than you make.
How hard is that?
Not very hard at all.
Work back to that economic philosophy – spend less than you make – and things will be fine no matter what happens to the government and their “new” dribble down economy, or the balanced budget philosophy or any of the other stuff that comes and goes.
Make it, then spend it and don’t spend before you make it. Then, take a bit and put it aside for a rainy day and then never spend it.
It’s as easy as that!