Economia

Does Government Spending Boost the Economy?

By edson
August 13, 2020 11:15
Tags
0 Comments



A recent article in Business Insider by Jim Edwards offers putative “Proof That Government Spending Cuts Hurt Economic Growth.” He even goes so far as to claim that “war is good (economically).” In this article, I’ll explain what’s wrong with this popular and age-old fallacy.

The Truth about Savings and Consumption

By edson
August 13, 2020 11:07
Tags
2 Comments



We regularly hear how important consumer spending is for the economy. The story goes like this: the more consumers spend, the more money circulates in the economy, which stimulates healthy job growth and profits. If people could be encouraged to go out and spend a little more of their paychecks, we’d all be better off. Remember the infamous “stimulus checks” back in 2008? Same idea.

The Problem of Production

By edson
August 12, 2020 17:53
Tags
2 Comments



Again and again we hear it said: "The problem of production has been solved." Look at the stocks of wheat and bales of cotton go­ing begging! Consider the giant steel mills and factories with un­used capacity that could be brought into production! Many view this unused wealth, the sur­pluses and potential productive power, as a breakdown in distri­bution.

If Virus Tests Were Sodas

By edson
May 18, 2020 14:42
Tags
0 Comments



By Paul Romer

Imagine a world in which the only way to get a soda is to get your doctor to write a prescription. It costs $20 per can. Your insurance company pays. The economy produces about 100,000 sodas each day.