The bubble is wrong. More workers + higher wages = higher prices, not more demand. If there's less cash circulating in the economy, prices simply fall so firms can move goods and maximize profits rather than holding on to stuff indefinitely.
The equals section has been proven wrong historically. As our wealth has grown exponentially, the burden of government has grown exponentially. They take what they can get...
Lowering the tax rate decreases the amount that the government appropriates for the economy, leaving more for the private sector. At best, its a zero sum game. But once we start looking at the incentives of government, as well as the calculation/information problem, we see the private sector is the lesser of two evils.
I'm all for hiring more workers and paying them higher wages. In fact, I'd like to hire every unemployed person in the world and pay them more than they've ever made in their lives. Just one question: where do I get the money?
I might turn my focus on how inflation and deflation actually occur. How did costs get so out of control that consumers gradually needed to rely more on credit to afford their daily living expenses. Did the government have something to do with that?
So inflation is the "free" marketplace's drug addiction? Inflation can be just as easily controlled as wages, so stop treating inflation like it's a monster in the closet.
*The free market is not the problem, the government is.
ReplyDelete-Anonymous
The bubble is wrong. More workers + higher wages = higher prices, not more demand. If there's less cash circulating in the economy, prices simply fall so firms can move goods and maximize profits rather than holding on to stuff indefinitely.
ReplyDeleteThe equals section has been proven wrong historically. As our wealth has grown exponentially, the burden of government has grown exponentially. They take what they can get...
Lowering the tax rate decreases the amount that the government appropriates for the economy, leaving more for the private sector. At best, its a zero sum game. But once we start looking at the incentives of government, as well as the calculation/information problem, we see the private sector is the lesser of two evils.
Yea, the free market is not the government!!!111 Great insight :)
ReplyDeleteI'm all for hiring more workers and paying them higher wages. In fact, I'd like to hire every unemployed person in the world and pay them more than they've ever made in their lives. Just one question: where do I get the money?
ReplyDeleteI might turn my focus on how inflation and deflation actually occur. How did costs get so out of control that consumers gradually needed to rely more on credit to afford their daily living expenses. Did the government have something to do with that?
ReplyDeleteThe government is a criminal gang writ large.
ReplyDeleteThis chart reminds me of that guy holding the sign that reads, "GET A BRAIN MORANS." Classic.
ReplyDeleteSo inflation is the "free" marketplace's drug addiction? Inflation can be just as easily controlled as wages, so stop treating inflation like it's a monster in the closet.
ReplyDelete