Monday, April 2, 2012

Economics 101 (again...)

(Why do I bother?)

Gross Domestic Product: GDP.

GDP = private consumption + gross investment + government spending + (exports − imports)

In the modern U.S. economy, that 'private consumption' term accounts for close to 70% of GDP.
"Private Consumption" = folks buying stuff.

Giving tax breaks to investors (the GOP's so-called "job creators") is pointless as a spur to the economy. Investors constitute that "gross investment" term.
Why invest (in capital equipment, factories, workers) when no one has any $$$ to buy the goods and services you produce?

The current recession derives from depressed DEMAND, not lack of supply.
Business statistics confirm this: firms are SITTING ON tons of $$$, waiting for the economy to rebound.

The economy will rebound when folks have jobs!... and are earning $$$ to SPEND! - generating DEMAND.

How best to quickly generate JOBS?
The third term in the equation: GOVERNMENT SPENDING!!!
Build/repair roads and bridges, fund education, fund healtcare.

In GOP parlance, "fiscal responsibility" means CUTTING government programs - withdrawing $$$ from the economy, killing jobs... and thereby reducing employment, reducing tax revenue, ... and making the U.S. economy WORSE!

Folks, this isn't rocket science, but your friendly GOP hasn't a clue.

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