No more IOU’s, just cash from now on.

It cracks me up to hear the presidential candidates saying that they won’t raise taxes.  We are so deep in debt right now that we are probably going to see a longer work week sometime soon, just so that we can have something to take home after taxes.  Bailing out the greedy and the lazy will push us much deeper into the red than anyone thought possible just a few months ago.

What happened to the American work ethic?  When did it become disrespectful to work?  A great deal of the economic woe that we are facing now is because so many Americans were trying to get wealthy without having to work.  Not to mention the impact that having to pay a cash dividend every year has had on our industries.  Even when business is horrible, big companies have continued to hand out hundreds of millions, even billions, in cash to people who own their stock.

It used to be that buying stock was considered an investment in the future, because the payoff would take a few years, as the company gradually grew.  Somewhere along the line, somebody realized that they could sell a lot more stock if they promised to pay the people who bought that stock a cash payment every year, just for owning the stock.  In today’s world, large sums of cash can be hard to come by, resulting in companies having to get loans to pay the stockholders their dividends.

Even when that doesn’t happen, the profits that the company make are not being reinvested in the company, they are going to the shareholders.  Instead of developing new products, and more efficient methods of producing existing ones, companies are ‘outsourcing’ much, if not all, of their production.  This looks great on the balance sheet, but in the long term, it is suicide.  Who is going to buy the products that the company makes if everyone is out of work?

Everyone is getting all hot and bothered about the completely unrealistic levels of compensation that many executives have been getting, but all of their salaries and bonuses together would hardly be a drop in the bucket compared to the billions and billions that are paid out in dividends every year.  Those dividends are the future of our nation, the ability to grow, to innovate, to improve.  We are throwing those things away so that a bunch of lazy idiots can sit around doing nothing.

If the work week ends up being 50, or even 60, hours, than I think we should make it illegal to pay stockholders in cash any kind of dividend.  Make their shares worth more, so that all of us will be worth more.  The growth that we thought we were enjoying has turned out to be an illusion, a bubble that all of us helped to create.  Wealth is once again going to be measured by tangible things, not pieces of paper.

No matter how much the government gives the banks, the banks are not about to start loaning money out, because the bankers know that we are all broke, and they don’t want to lose any more of the so-called value that they are responsible for.  Because they will have to pay their shareholders with cash, not IOU’s.

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One Response to “No more IOU’s, just cash from now on.”

  1. Susan Kishner Says:

    I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts.

    Like

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