Everybody loves Capital Formation....But nobody wants to SAVE.

Recently I have been reading some local articles in our fair city about economic development---and it seems whenever those two words are uttered, "economic development", it is very necessary to hold a meeting, share lunch with hundreds, and put on a seminar or two, or three or three hundred to examine all the possibilities. And of course generate the support paperwork documenting all the effort of those seminars and meetings for the folks that write minutes so that in the final accounting of things, folks will know undisputedly that the governmental folks..well...did their best.

One recent article noted a key difference----that capital formation and simply spending money on infrastructure is different--yes. Spending on infrastructure just develops infrastructure and prepares a backdrop to the drama of the actual job creation---which requires capital. Let us say we want to develop a job that pays 30M per year. With interest rates of 3%, what would it take in terms of capital to have enough cash on hand to generate the income to afford the salary, much less the goods or services to be provided. The way I calculate it, it would be a million dollars in capital to provide 30M in income to assure the salary paid. ...for one person employed.

Maybe the math is too conservative....maybe you can find an investment that is guaranteed that produces better than 3% guaranteed---more power to you. The point is that capital formation is required to pay salaries. Everybody loves capital formation.

At the same time. Here is the mystery. Nobody loves to SAVE. Nobody in America is saving. All the piggybanks are broken it seems.

So---what is the conclusion? After all the ranting about job formation, job development, job, job job.......it is all hot air if the powers that be want to spend on infrastructure but never allow the citizens the disposable income or the incentive to save. Without the reality of saving----all the paperwork, all the meetings....yes all those wonderful sharing of feelings and lunches----are just a waste of time.