Every dollar government injects into the economy must first be taxed or borrowed out of the economy.
No new spending power is created.
It's merely redistributed from one group of people to another.
Economic growth -- the act of producing more goods and services -- can be accomplished only by making people more productive.
Saturday, November 15, 2008
Thursday, November 13, 2008
The current crisis
The current crisis resulted primarily from anticapitalists forcing banks and mortgage companies to lend money to people with little or no means to pay it back.
Wednesday, November 5, 2008
What the government gives with one hand
What the government gives with one hand, through increase spending,
it take away with the other, through increase taxation.
it take away with the other, through increase taxation.
Cheap and easy money
Cheap and easy money fueled by the FED generated speculation which involves buying for resale rather than use in the case of commodities, and for resale rather than income in the case of financial assets.
Monday, November 3, 2008
Fed gets itself and the economy in trouble
In 2003 the Fed cut the fed funds rate to 1% and kept it there for a full year through June 2004.
Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.
Fed's main obligation is price stability.
Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.
Growth in the third quarter of 2003 was 7.5%, yet the Fed kept its foot on the monetary accelerator for many more months.
Fed's main obligation is price stability.
Fed gets itself and the economy in trouble when it attempts to use monetary policy to manage growth.
Tuesday, October 28, 2008
When markets are free
When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses.
Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.
Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.
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