Supply versus Demand
Posted: Sun Jun 09, 2013 11:05 am
I'm not an economist. I haven't even read texts on economic theory. I don't want to. For one, the subject doesn't interest me innately: my interest is forced only when the economy is in trouble. Second, it seems to be a very soft science with few clear widely accepted truths. It seems too suspect to bias. There are also so many variables it seems almost impossible to come to clear conclusions.
So with that caution, I'm going to share my opinion which is based solely on common sense, not education. I'm interested in the responses of people who are able to discuss it somewhat objectively. In other words, not droopy, ldsfaq, or bcspace. I plan to ignore them if they pipe up. I don't want just another partisan mud fight.
I'm not stating "truths", but my opinion, so every statement should be prefaced with "I think", or "in my opinion", even if not explicitly stated.
I think that both supply and demand are crucial elements, and when one side is neglected, then the economy suffers. That's obvious. You both need businesses who have enough capital to produce goods, as well as consumers with enough money to buy the goods. There are times in our country's history when one side or the other struggled to maintain their part of the balance and needed government action to rectify the balance. There were times when the tax burden on businesses and the wealthy were so high that businesses had too little capital, and the wealthy didn't have as much to invest. That's when it was time to cut taxes. There were times when consumers, due to low wages for extended periods of times, just didn't have the money to purchase enough goods to keep the engine running. That's when it was time for government to invest in ways to improve worker income or improve the job market. IE, stimulus.
In other times of recession, republicans seem to agree that stimulus was necessary. Republicans voted for stimulus spending under Bush and Reagan. They just seem to struggle with the concept under democratic presidents. US corporations right now have a lot of capita, near an all-time high. http://knowledge.allianz.com/finance/ca ... -with-cash
Tax rates for the wealthy are, historically speaking, relatively low. The wealthy have been doing quite well for decades now.
It's clear that the problem in our economy currently is that consumers don't have enough cash to purchase. Wages have been stagnate for those fortunate enough not to experience unemployment. People are experiencing more long-term unemployment or underemployment.
So the answer seems clear to me. The government needs to invest in another stimulus. Reagan and Bush stimulated the economy by increasing defense spending. Our infrastructure is literally crumbling before our eyes. Isn't that a clear signal that it's time to invest in rebuilding our infrastructure? We really need it, and people need the jobs that would go along with that. Why is this so difficult?
So with that caution, I'm going to share my opinion which is based solely on common sense, not education. I'm interested in the responses of people who are able to discuss it somewhat objectively. In other words, not droopy, ldsfaq, or bcspace. I plan to ignore them if they pipe up. I don't want just another partisan mud fight.
I'm not stating "truths", but my opinion, so every statement should be prefaced with "I think", or "in my opinion", even if not explicitly stated.
I think that both supply and demand are crucial elements, and when one side is neglected, then the economy suffers. That's obvious. You both need businesses who have enough capital to produce goods, as well as consumers with enough money to buy the goods. There are times in our country's history when one side or the other struggled to maintain their part of the balance and needed government action to rectify the balance. There were times when the tax burden on businesses and the wealthy were so high that businesses had too little capital, and the wealthy didn't have as much to invest. That's when it was time to cut taxes. There were times when consumers, due to low wages for extended periods of times, just didn't have the money to purchase enough goods to keep the engine running. That's when it was time for government to invest in ways to improve worker income or improve the job market. IE, stimulus.
In other times of recession, republicans seem to agree that stimulus was necessary. Republicans voted for stimulus spending under Bush and Reagan. They just seem to struggle with the concept under democratic presidents. US corporations right now have a lot of capita, near an all-time high. http://knowledge.allianz.com/finance/ca ... -with-cash
Tax rates for the wealthy are, historically speaking, relatively low. The wealthy have been doing quite well for decades now.
It's clear that the problem in our economy currently is that consumers don't have enough cash to purchase. Wages have been stagnate for those fortunate enough not to experience unemployment. People are experiencing more long-term unemployment or underemployment.
So the answer seems clear to me. The government needs to invest in another stimulus. Reagan and Bush stimulated the economy by increasing defense spending. Our infrastructure is literally crumbling before our eyes. Isn't that a clear signal that it's time to invest in rebuilding our infrastructure? We really need it, and people need the jobs that would go along with that. Why is this so difficult?