Economics Thought For The Day

Posted: January 12, 2009 in BCWYAF, Crooks & Liars, Economics, Utter Inshanity!

Economic recovery is not achieved through more government spending, but rather, through more consumer spending.   The two are, by definition, mutually exclusive.  For greater government spending entails both increased taxation and increased national debt, resulting in less consumer spending power through less available cash, decreased value of what is available, and a reduced willingness to spend it based on uncertainty about the future.

Greater consumer spending results in increased production, marketing and distribution of goods, which of necessity means more jobs to performs these tasks.  Consumer confidence translates across a variety of economic and social sectors, driving an overall confidence in the economy as a whole, and thus both directly and indirectly increasing the stability of the markets and all the governmental and social institutions reliant on them.  Increased consumer spending actual increases tax revenue as well, through those taxes already levied on durable and consumable goods, road taxes, sales taxes, fuel taxes, etc.

Giving people more of their own money to spend is far and away the better prescription for economic health than greater doses of burdensome taxes which, rather than spreading the wealth, insteads result in an oppressed, sullen, resentful and insecure populace, one less and less likely to view its own government with forebearance or affection.

  1. Two Dogs says:

    Try this one continuation of the consumer line. In order to be a consumer, you much purchase with things that you have produced. People that receive their money from the Federal government are NOT consumers because they are living off of the surplus of producers. In order for someone to consume, they must have produced something that made them a surplus of goods, services, or value with which they can trade.

    The only way for us to get out of this economic nightmare is for our money to be backed with something of value, well besides the credit extended by the government. Paper money backed with nothing, like gold, is only pieces of paper with designs on the face of that paper.

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