Of Course Trickle Down Works

Discussion in 'Political Opinions & Beliefs' started by Just A Man, Dec 16, 2017.

  1. Longshot

    Longshot Well-Known Member

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    The desire to consume if always there. It's part of human nature.

    But production comes before consumption.
     
  2. sawyer

    sawyer Well-Known Member Past Donor

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    And ****ing comes before procreation but first there is desire to ****.
     
  3. Longshot

    Longshot Well-Known Member

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    Yes, I agree. First comes the desire to consume. That's part of human nature. Then in order to fulfill that need, we first engage in production so that we can afterwards consume what we have previously produced.

    Production must precede consumption.
     
  4. sawyer

    sawyer Well-Known Member Past Donor

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    And demand must precede production. Demand is desire to consume.
     
  5. Longshot

    Longshot Well-Known Member

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    Yes, the desire to consume is always there.

    So when one is stranded on a desert island, he has a desire to consume food. How does he fulfill this desire?
     
  6. sawyer

    sawyer Well-Known Member Past Donor

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    The desire to consume is not always there as I pointed out in my logging company example. When nobody is building houses there is no desire to purchase lumber.
     
  7. Longshot

    Longshot Well-Known Member

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    The production of lumber must precede the consumption of that lumber.

    It always goes this way: a desire, then production, then consumption.

    This is Econ 101
     
  8. sawyer

    sawyer Well-Known Member Past Donor

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    Now you have got it. Desire is first , desire to consume.
     
  9. Longshot

    Longshot Well-Known Member

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    Yep, and production creates wealth and consumption reduces wealth.
     
  10. sawyer

    sawyer Well-Known Member Past Donor

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    Consumption as you already admitted creates production which increases wealth. Back to my logging company example. When housing starts went up I hired more men and bought more equipment which created more wealth. More men had jobs with me and with companies that built equipment. The sawmill hired more men to turn my logs into lumber. More log truck drivers were hired to haul my logs to the mill. Lumber truck drivers were hired to deliver lumber to stores where more store employees were hired. Carpenters were hired to build houses not to mention plumbers, electricians etc. Then furniture and appliances were needed so their factories hired. The list goes on and on and on. Consumption creates wealth at every step. Hope you learned something here. Today's lesson is over.
     
  11. Longshot

    Longshot Well-Known Member

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    No. Production produces wealth, while consumption reduces wealth.

    If you produce 10 loaves of bread (wealth), and then you consume a loaf, do you have more or less wealth than you had previously?

    Also, I didn't "admit" that consumption creates production. Try again.
     
    Last edited: Dec 21, 2017
  12. AFM

    AFM Well-Known Member Past Donor

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    But in economics the term demand means the actual act of purchasing and consuming. Desire is funded by production and demand is the culmination of transferring wealth to the producer in exchange for the product. It's an unfortunate choice of words.
     
  13. AFM

    AFM Well-Known Member Past Donor

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    Your analysis of the situation (housing starts went up) caused you to increase production. This increase in product was sold (consumed) to the housing developers. That is defined as demand in economics. Wealth was transferred in the transaction to the benefit of both parties.
     
  14. sawyer

    sawyer Well-Known Member Past Donor

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    Let's look closer at that.

    "Definition: Demand in economics is how many goods and services are bought at various prices during a certain period of time. Demand is the consumer's need or desire to own the product or experience the service. ... This drives economic growth and expansion. Without demand, no business would ever bother producing anything."

    https://www.thebalance.com/what-is-demand-definition-explanation-effect-3305708
     
    Last edited: Dec 21, 2017
  15. AFM

    AFM Well-Known Member Past Donor

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    But without production there would be no consumption. The production occurs based on an assumption that all production will be purchased.
     
    Last edited: Dec 21, 2017
  16. Longshot

    Longshot Well-Known Member

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    And production produces wealth while consumption reduces wealth.
     
  17. AFM

    AFM Well-Known Member Past Donor

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    But desire is meaningless unless funded by production and those funds are used to procure your lumber.
     
  18. sawyer

    sawyer Well-Known Member Past Donor

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    It's not assumption it's know need and desire.

    Demand is the consumer's need or desire to own the product or experience the service. ... This drives economic growth and expansion.
     
  19. sawyer

    sawyer Well-Known Member Past Donor

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    Funds from production are a result of consumption. Fun to go round and round on this but what us the point you are trying to make here?
     
  20. Longshot

    Longshot Well-Known Member

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    I think the point is that consumption reduces wealth while production increases wealth.
     
  21. sawyer

    sawyer Well-Known Member Past Donor

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    I know that's your point but I'm hoping the other guy has a point that makes some sense.
     
  22. AFM

    AFM Well-Known Member Past Donor

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    The funds are from the creation of wealth by your customers.

    The point is that production always precedes consumption. Desire is meaningless unless funded and those funds come from your customers wealth creation such as their trading their human capital for wealth creation for their employers for which they are compensated with money.
     
  23. AFM

    AFM Well-Known Member Past Donor

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    It's always an assumption until the lumber is sold. Businesses take risk by producing products assuming that there will be customers who will have the means and desire to purchase those products. Economic demand is the purchase of those products. Many citizens of Bangladesh desire Corvettes - but that is no reason for GM to in crease production by thousands of Corvettes.
     
  24. sawyer

    sawyer Well-Known Member Past Donor

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    So in the context of this thread does that interpretation mean in your mind that supply side or as you call it trickle down doesn't work? If not why not?
     
  25. sawyer

    sawyer Well-Known Member Past Donor

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    Wrong. The sawmill wouldn't buy logs from me until they had more orders for lumber than they had logs in the yard to fill those orders.
     

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