National Financial Responsibility

A Nation's Money Supply is very important. Money is promises - promises that when you supply a certain amount of money, the other partner in the exchange will supply a good or a service, at a pre-determined value. The heart of a nation's agreements on such things is the amount of work that nation is willing to do and can do to fulfil the promises it makes relating to such money. If the government floods the economy with too much cash, to try and pump up the economy, it might work briefly, but reality will set in gradually, and the currency will be devalued. Too much devalued money, and we have rapid price increases - called inflation - which destabilizes the economy. Think about it - if prices are rising too quickly, people and businesses budgets are thrown into confusion. Companies - and households - which run a tight budget can potentially go under, because of too great price increases, which destabilize the economy. Cashing in is risky business. Responsible national financial management is moderation - allowing the standard amount of work done pay for the standard amount of goods and services - and only increasing the finances of a society when the corresponding growth in population has occurred. Stable economies without huge cash splurgings mean stable businesses and stable employment, which leads to stable households and stable lives. Stimulus - a large cash injection - CAN be done on rare occasions. If you let the growth settle in from stimulus, and leave it at that for the economy to naturally adjust to this surge, the retraction of economy at the end of stimulization will be handled if no further factors change the economy drastically. A society is probably willing to do the hard work to produce more goods and services during a stimulus period, which is motivation and incentive for their own reward, and if this work is done, stimulus can be successful. But do not abuse it - people usually only have a standard amount of work in them. They psychology, ethic, attitude and morality of a nation are contributing factors to its work output. Economic planners need to be sensitive to how much work will really get done in any given economy, and keep their eye on future trends on these affecting factors.