If they are spending it on necessities, they are still spending and that does fuel the economy.
-----Original Message----- From: Sam [mailto:[email protected]] Sent: Tuesday, April 12, 2011 10:29 To: cf-community Subject: Re: [Economics] Of the 1%, by the 1% and For the 1% On Tue, Apr 12, 2011 at 11:03 AM, Gruss Gott <[email protected]> wrote: > That's false. I'm for a balanced economy; who the hell wouldn't be? Borrowing money to pay for nothing just so people can spend is not balance. > What Keynes was saying is simply a fact of accounting: C+G-T=0 over > the long term. > > In other words, if consumer and business spending drops government has > to step in to fill the gap or the economy collapses. (Even if does, > though, there's no guarantees). And Friedman says when the government falsely props up the economy it won't self correct. When people work temp jobs to dig holes that won't be used they don't spend the money on luxury items, they buy neccesities and or save for better times. > That's the place we're in now, which is not a place I think we > should've gone, but here we are. Except for Apple products most people are saving. > And, frankly, it's WAY more complicated than that now because we're > now dependent on the global economy and the forces at work there; in > other words if our monetary and fiscal policy isn't aligned with > theirs then it kind of doesn't matter what we do. That's always been the case. > The globe has built an interconnected economy with no system in place > to manage it. All the normal rules no longer apply. > > Take Japan: their government encouraged exports at the expense of a > competitive (globally) set of local businesses. This is why you see > Sony and Toyota here and McDonald's there. (i.e., how many global > japanese restaurant chains can name? hint: zero). > Our government has spent the last 3 decades encouraging manufactured > consumer imports funded on credit with imported Chinese money, i.e., > we borrow their money and buy their stuff. I don't think the Government encouraged people to buy Japanese cars. Trade wars are different issue that we fought as best we could, or sometimes didn't. > The old saying (repeated on this list) was, "oh well, if we can't pay > them back too bad for them". That ignores the interconnected economy. I think that was said in response to you claiming China would crush America whenever it wanted to. > If we can't pay them back the global economy collapses including ours > so too bad for us. That almost happened in 2007 and all of the forces > that caused it and now WORSE. The bankers needed bailing out and they got it. Now we need business to feel safe about expanding and hiring and the problem will be solved. Right now Obamacare is threatening most future businesses in the US. > And I have no bloody idea how we dig out and, scarily, neither does anyone else. Not on the left, no. Because they refuse to admit Keynesian economics has fail ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Order the Adobe Coldfusion Anthology now! http://www.amazon.com/Adobe-Coldfusion-Anthology/dp/1430272155/?tag=houseoffusion Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:336220 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/groups/cf-community/unsubscribe.cfm
