Scarcity
Scarcity
The first topic that I wanted to touch upon is the term scarcity. The basic definition of scarcity is unlimited wants, limited resources. We as humans will never be able to satisfy every want we have. Because of limited resources we have to constantly make choices. Keep in mind that resources can be anything. Time, money, cotton, corn, leather, anything can be considered a resource. For this example we’re going to use time as our resource, it’s the only thing in the world that everyone is bound to. Rich, poor, teachers, CEOs, stay at home moms, are all limited to the same 24 hours per day. If you work eight hours per day, you’ve allocated eight of your 24 hours to earning money. You spend another eight of your 24 getting a good night’s rest. That leaves you with eight hours left, that you split evenly running errands and going to the gym. You’ve made a choice to do these four tasks with your 24 hours. Each of these tasks were done by choice because it wasn’t possible to fulfill all of your wants. These choices came with an Opportunity Cost, which is giving up the next best alternative or choice. You could have done countless other things with your time, learn a musical instrument, go on vacation, go to school, spend time with loved ones but you made the choice to go to work, sleep, errands, and head to the gym. Those four tasks were the most efficient use of your allotted 24 hours in a day, and they came at a sacrifice to all of the other things you could choose to do. This idea of scarcity applies businesses as well. A company must make the choice to either make T-Shirts or blankets with its 100 tons of cotton. Sneakers or hand bags with 50 tons of leather? Skyscrapers or golf clubs with 80 tons of steel? If a company has unlimited resources they would simply choose to do both but instead they must choose the one that turns the most profit, in the most efficient way possible.
How does scarcity pertain to government? To put it simply, it doesn’t, at least not in the same manner it applies to individuals and private businesses. Money is a resource that the government spends inefficiently. Welfare programs, national defense, VA hospitals, education, among countless others all require money. Yet the government does not have to make a choice as to which endeavor receives money and which doesn’t. It is allowed to fulfill its unlimited wants, be essentially have an unlimited income of money. If the budget does not allow for all of these programs the government simply does one of two things that the average person or business can’t. It can either tax the citizens more, in order to increase its own income or go into massive amounts of debt to make sure that the programs are funded. Either way a choice is not required to be made, and money is spent inefficiently.
