Consumption vs. Production

Basically, let's say we have 10 thousand regulations, while we "free trade" with nations who have zero. 1000 of our regulations are such things as anyone would agree upon. Child labor to anti-trust. However, 9000 of those regulations serve no other purpose than to guarantee wealth of the state and large firms, as well as stifle new competition to said established large firms. We need to demand those other nations get said base 1000, while doing away with those 9000 useless ones of our own.

 

The reality is, whether you intended to or not, you just established yourself as a traitor to the American people and an accomplice to the regime destroying our nation, to all in the know who are reading.

 

A flawed conclusion. Stimulus must FIRST TAKE from the economy before being put back into the economy. It is taken FROM those who would use it best and given to the government to put where they 'think' it will stimulate. They are always wrong.

Companies now spend millions of dollars for inventory management programs that manage their inventory to a "JUST IN TIME" inventory system. For instance, I think its Absolute Vodka, that the bottles they ship out filled with vodka each afternoon, ARRIVED at the distillery that mid morning. Businesses want production to exactly match consumption JUST as inventory is consumed.

Government has stimulated the general economy to the tune of TRILLIONS of dollars. And the economy is still awful. Government has also attempted to stimulate the housing market specifically with billions of dollars. The housing market still languishes in limbo.

 

Well said...this is the reality that blind ideologues can't see. It's all well and good to rail against big government, but when we are on the verge of economic collapse and private industry isn't willing to invest in the economy in order to make it start moving, we turn to government to provide stimulus through projects that put people to work and put resources into the system to help make money move.

It's simple and it works, and it's too bad the ideologues allow themselves to be lead by the corporate agenda that only wants to see more wealth control pushed into their hands regardless of the cost to society.

 

Another flawed premise mistakenly thinking govt is any kind of an answer.

" given resources so that they can start producing."

Govt cannot GIVE resources without taking those resources from those who already HAVE those resources IN the economy. So govt TAKES 100 'resource units' from the economy that can better utilize them than govt, then the govt wastes half those 'resource units' in internal costs, waste and corruption, and sends the remaining 50 'resource units' back into the economy that now has 50 fewer 'resource units.'

 

When the government uses tax dollars to improve and maintain infrastructure, that creates more opportunity for the private sector to realize growth. It also moves money and generates economic activity. Your assuming the resources the government uses to provide such infrastructure would have been circulating through the economy at the same rate, which is less likely the higher up the economic chain taxes come from...

 

I subscribe to the Austrian School of economics, after all they've been correct in all their predictions, while the state fools flounder in ignorance.

If you want specifics... be specific, I would be glad to provide analysis.

 

Hardline ideologues are worthless. Neither economic theory is perfect. It takes a balance, particularly as our economy is extremely complex.

 

Fair enough. Explain the positive economic analysis supporting the prediction that we are in a depression. What is the basic Austrian School definition of a depression? What economic indicators are utilized to come to the conclusion that the United States is in a depression? Utilize proper graphs, models, charts, etc. to showcase the Austrian School's predictions.

 

I currently favor no economic theory. I prefer to utilize traditional macro-economic analysis.

 

The problem arises when the masses are duped into accepting false dichotomies as fact and then polarized into easily manipulated factions and driven to oppose the "opposition" at all cost....

 

Furthermore, I worry that people merely study the different alternative macro-economic theories (Keynesian, Austrian, Supply-Side, Chicago, etc.), but not traditional macro-economics. It is easier to understand one alternative macro-economic theory, but to understand traditional macro-economics, and numerous alternative macro-economic theories takes time. However, it is worth it once you determine which alternative acro-economic theory you prefer.

 

I don't claim to be an expert in econmic theory by any stretch, but I would suggest that the economic challenges facing the global economy today have more to do with the influence of vast monied interests upon national governments than the influence of the government on the economy. A relatively very small group of people wield extreme influence upon thw global economy through extreme economic disparity and they essentially use their wealth disparity to dominate governmental policy.

 

The major indicator of a healthy economy are unemployment (or employment) rate, housing cost, availability and sales and the cost of consumer goods. All these indicators lean towards depression. The saving grace of the Great Depression was the cost of consumer goods fell, even despite the FDR administration's attempts at price fixing. The current depression has consumer goods prices rising, which indicates the current depression will be worse than the last.

The Austrian definition of a depression is the same as anyone's, a depression is a sustained, long-term downturn in economic activity in one or more economies.

Graphs are for children. There is no mathematical equation that can accurately explain the business cycle. Austrian School economics is based largely on praxeology, or the study of human action... people will do what is their own best interest.

http://mises.org/resources.aspx?Id=852e1d16-182c-4570-900f-368b7c2385cb

http://mises.org/journals/jls/18_2/18_2_5.pdf

Peter Schiff predicted the current depression in 2006...

[ame="http://www.youtube.com/watch?v=2I0QN-FYkpw"]Peter Schiff Was Right 2006 - 2007 (2nd Edition) - YouTube[/ame]

Peter Schiff: We're in the early stages of a depression now. It's going to be a horrific experience for average Americans who are going to watch their standard of living plunge. The cost of living is going to escalate dramatically. We are going to see soaring prices for the basic necessities of life, like energy, clothing, and other things. Education and health-care costs are going to continue to spiral out of control. Millions of more Americans are going to lose their jobs, and all of us are going to lose our freedoms and our rights. As the government gets bigger, it tries to end the crisis; but its policies are creating, perpetuating, and making it worse.

http://www.fool.com/investing/gener...ff-were-in-the-early-stages-of-a-depress.aspx

...others predicted a similar downturn decades earlier, but without a timeline.

 

Peter Schiff is the only economist I listen too.

I owe it to him for pretty much saying he'd be wrong all those times in the past.

 

They take $1.00 tax dollar out of the economy. And they return a $.50 tax cents. That's the "We lose money on every sale but the volume makes up for it." business model. It didn't work 60 years ago when it was first said as a joke and it still doesn't today and it will not work in the future either. Government is a net LOSS to all economies.

 

More like they take $5 and return $1. Bureaucracy takes the rest.

 

Some liberal wag will now demand a link to that figure. Claiming that the govt puts in $2.86 for every dollar it takes out. That reason says that's impossible does not sway them a bit.

 

I agree, even if taxes are not increased, the money printed reduces the value of the money that is in the economy. Obviosly, the programs that were tried were just to keep things from getting worse for the short term, but what will come in the long term? Will there be some way the economy can balance out? Or will it have to get worse to get better?

 

The bolded excerpt may be a flaw of Austrian economics. Positive new classical macro-economic analysis is all about graphs, models, charts, mathematical equations, etc. New classical manifests directly from Adam Smith's classical macro-economic analysis as the second school of economics. New classical combines classical economics, Austrian economics, and Laussanne economics. Eventually, these three combine when Alfred Marshall creates the final version of Neoclassical macro-economics. New classical economics is what you learn in an introductory economics class.

On a different note, merely studying human action can lead to exorbitant normative economic analysis. Therefore, like homerjay, I would have to question aspects of the Austrian School, but also uphold others.

http://en.wikipedia.org/wiki/Classical_economics

http://en.wikipedia.org/wiki/Neoclassical_economics

http://en.wikipedia.org/wiki/New_classical_macroeconomics

http://en.wikipedia.org/wiki/Carl_Menger

http://en.wikipedia.org/wiki/William_Stanley_Jevons

http://en.wikipedia.org/wiki/Leon_Walras

http://en.wikipedia.org/wiki/Alfred_Marshall

Actually, Austrian economics was originally part of the Neoclassical School, but eventually would split. Maybe the reason why was the subjectivity of studying human action without mathematics.

 

I think arguing economics at this juncture in America is as futile as arguing political ideologies. What the global elite want, the global elite get. They pick and choose from every school of thought, whatever serves their purpose. They use black and white to separate the truly ignorant. They somehow have workers supporting free money to bums, while they have people worth a few mil convinced they're part of the "rich". They have people making 60k a year convinced they're middle class, when really those worth a few mil are the middle class, all of which are the ones paying all the taxes, most of which trickle up. Politically, they have 300 million completely different people convinced they are republican or democrat, left or right, conservative or liberal, and red or blue. For intellectuals, they have Keynesian or Austrian, like a billionaire or central banker gives a (*)(*)(*)(*). And if you call them on the fact they use whatever they want to benefit the elite they say, "of course. It's called compromise".

 

If you were correct, and the government was returning less money to the economy than it took in, we'd be experiencing significant and sustained deflation. We aren't, and you aren't.

 

Exactly how I see it...

 

I predicted the economic collapse in 2006, too. Our economic situation has very little to do with economic policy. The single most driving factor in out failing economy is rampant corruption and fraud being perpetrated and coordinated at the highest levels of the public AND private sector. Small and midsized business competition is squashed by regulation and legislation that favors the big players, while deliberate economic bubbles are used to give the appearance of economic growth as supranational corporate interests shift their operations out of the country.

 

There's no deflation because the Fed pumps new money into the system. Try again.