...so foreign to politics. On page 9 of Schiff's cartoon book it says thus "By doubling his productivity Able is now able to produce more than he needs to consume. From gains in productivity all other economic benefits flow." I added the emphasis.
How often do you hear of productivity being the main goal behind any sort of economic stimulus? Instead they tout tariffs that encourage domestic production, production which is less efficient. They pander to unions that are entirely less productive. They inject newly created funds (cuz they sure haven't underconsumed to procure those funds) as an effort towards stimulus, funds which only increase the money supply, which in my mind is the only genuine definition of inflation. Deficit spending? As if money is wealth. I'm obviously no Keynesian and I continue to struggle to see how deficit spending can do anything but prolong the necessary corrections.
I think a HUGE principle from this simple story thus far is simply the need for underconsumption to precede any sort of growth whatsoever, yet underconsumption goes against everything our government is built to do. Our government not only overconsumes (even the 90's show large increases in the money supply, according to "sources", and it's a lot easier to run a surplus when that happens) but it seriously discourages underconsumption in the private sector.
Government has managed to take every healthy incentive and pervert it. Moral hazards run rampant, thus disabling risk to function properly. Genuine savings is almost irrational due to inflation. Grow your earnings faster than inflation or die.
Anyway, tell me what I'm missing.
