It has occurred to me, and a lot of other people, that money tends to flow one way in our economy, toward those who own the most already. That fact has been immortalized in music, "The rich get richer", and in literature enough times for it to be relatively common knowledge. But is it true? If it is the question that occurs to me is a common enough one; "is this game rigged"? The answer, of course is yes it is rigged in favor of those who own something rather than those who own nothing. But even more importantly is it rigged so that only those who already own something can prosper under this system? So far it is hard to tell but it seems likely that it is not. Many of us in our generation have grown in wealth along with our national growth in income and home ownership during the last fifty years.

People can be wealthy for a lot of reasons in this nation; they could just be in the right place at the right time and win the lottery. They could be in the right place at the right time and work for Microsoft or develop Intel or create Amazon.com. They could have worked for ENRON in the glory days and have made a bundle, which they may or may not get to keep. There are a lot of paths to wealth in this nation but some of them appear to be blocked by barriers that might be better removed. Nothing kills incentive like a fence around a path to wealth that presents a false, unnecessary barrier to success. Unfortunately, the whole process of attacking growth in regulation by government has evolved into something quite irrational called "starve the beast". This process is now erecting more barriers to wealth creation than it is destroying. Those barriers are often extra-governmental. Our economy's trade imbalance and our government's deficits do threaten to become large barriers to access to capital.

Capital is stored up work, in a manner of speaking. It is that amount of money available to people who have enough to buy what they need and a little bit more. Money is ownership at its most abstract, it can be used to measure wealth but it is not really wealth unless the value of the currency is stable. Our currency has declined against the Euro by thirty percent in the last year but we buy less and less from Europe and travel less there so that won't hurt us much will it? Well, Europeans have a lot of money, some of theirs and some of ours and some of everyone else' on earth probably. Sometimes we need their money to build things or create companies or for other reasons, like to fund our government deficits. If they change their euros into dollars and get a four percent return on their money in a year where the dollar drops by thirty percent their money loses twenty six percent of its value! Even if they invested in a stock that gained twenty percent in value, a great return on investment they would have still lost ten percent of their money's value.

The amount of capital in Europe is considerable and it is unlikely to be available to entrepreneurs in the USA for a while. This is a barrier to wealth creation caused by a deficit in our balance of payments to other nations due to our importing fifty billion dollars more per month than we export. This is one imbalance in our economy that will hurt wealth creation in this nation. Another is the need for low interest rates to keep our economy on track. There is nothing less attractive than buying bonds that yield less than the drop in currency values expectable over the next ten years. The likelihood that interest rates will rise over the next five years in the USA is one hundred percent. They will have to rise in order to attract the capital to fund our Federal Government's deficit. How high they go will determine how much capital is available for wealth creation which can only be done in the private economy. If they go too high the cost of capital will be a barrier to entry for new companies into our economy. This will hurt the wealth creation process even more. Spending without taxing can spur the economy in the short term but it will certainly slow its growth in the future. So is the money game really rigged? No, but it is being tampered with by a pack of people who think that their ideology is more important than the wealth creation process. God bless and keep you all safe from those who want to starve the government and don't care who else starves while they are doing it.