Do you believe the political talk, we need to spend more money to get out of a recession?
How does that even make sense? If a normal person was in debt and couldn't afford anything, would he say I just have to spend more money? Usually this spending entails inflation, which lowers the value of the dollar and prices go up. So if you believe spending more money is the answer please explain why.
The world has more productive capacity than necessary. The owners of this productive capacity have bills to pay and make money from selling stuff. If they have less competition they can sell products for more. If they do not sell enough, the workforce is sent home and the creditors foreclose.
Spending money circulates money. Circulation of money is like blood. If your blood comes to a halt, you are dead. If people don't spend then prices rise as productive capacity decreases. Living within our means is important and spending is important, the balance between the two is very imortant.
Spending money circulates money, but where does that money come from? Usually it comes from inflation, which raises prices. So even though you are circulating money people can't buy as much anyway.
That is why the balance is important. You push any lever hard over and something will eventually go wrong.
That is how the system works it is perpetuated by debt. They push money into specific areas of the economy, cause a bubble and then the bubble bursts. Once the it bursts they are forced to inflate. It is a repeating cycle.
Post-WWII, John Maynard Keynes's structure of ideas about political economics became the new Gospel to the political set. It lent them intellectual clothing in which to garb their venal practice of buying some people's votes with other people's money. See more here: http://attikos.hubpages.com/hub/John-Maynard-Keynes
Essentially, Keynes postulated that government's deficit spending when times are bad balanced by surpluses when they're good would smooth out the boom & bust cycle of economies. His views fell out of favor in the seventies but were revived as cover for giving trainloads of the taxpayers' grandchildrens' money to banks and insurers when the financial industry approached collapse in 2008. The concept was vastly extended to other industries, or at least those of them that had had the wisdom to support the winning US presidential candidate, in the next few years as well.
There have been warnings all along that Keynes's ideas, while they could prop up a status quo for a long time, could lead only to ruin in the end. Europe and the US are now in the process of demonstrating the truth of that criticism.
it do not for the rest of the people of the Untied State for its the people money but to the Federal Government and there campaign big business, oil, and bankers buddy it make perfect sense.the tell the masses ANY KIND OF LIE TO KEEP US FIGHTING OVER BULL WHILE THEY MILK THE PEOPLE DRY OF ALL WEALTH. so until the people untied this country, God help us for it just to sad the hate we have for one another for us not to come together. Look, I don't have to like you to WORK WITH YOU FOR A COMMON GOAL FOR OUR FAMILY. THIS IS THE VALUE THAT NEEDED IN THIS COUNTRY
by Linda Chechar 2 weeks ago
Are you a spender or a saver?I was a spender, but am now a saver--was forced into that mode by the economy. It was just never in my nature to squirrel away money for a rainy day.
by Harvey Stelman 9 years ago
Our Politicians think they can. Tell me if you or the government can; and how?
by Sima Ballinger 7 years ago
Which is better: earn more money or save more money?
by Audrey Hunt 3 years ago
Are You Spending More Money This Christmas or Being Conservative This Year?As I understand it, sales are up this year for the Christmas Season. What about you? Are spending more money this year or being on the conservative side?
by Elizabeth Guinoo 8 years ago
Can we get rich if we double our income, we immediately double our expenditure?
by Abdus Salam 4 years ago
If someone give you 10 million dollar, what will be your spending plan?Someone ask me the question. Please Answer this question. thanks
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