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#Post#: 9--------------------------------------------------
How significant is the Economy, and to whom? Who controls it?
By: siva_canjeevaram Date: February 22, 2021, 8:47 am
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Of course the economy is very significant as well as central to
many people's lives. But just because it is significant to
people do not mean that Government needs to put its hands into
it. It is like my two-year-old son, who wants to help me when I
am baking or cooking. He don't know anything about it, and he
don't have the skills to do it, and on top of everything he is
controlled by his impulses to have fun. Similarly, a the
government's knowledge is far from perfect, and its skills are
always lacking, and on top of everything Governments are
controlled by politics, and politics are controlled by votes,
and re-election. The Government cannot control such a complex,
broad and wide thing like economy. It is a total scam to so that
the Government can help us get jobs. That is not true. The
people who get us jobs are the producers, and the people who
support the producers are the consumers. Hence we get the jobs
from producers and consumers. Not from Government. There is one
exception though, that is if the Government acts as the producer
and or the consumer.
The most wasteful thing the Government can do is to subsidize,
or incentivise producers or consumers in the name of "stimulus".
Because the Government does not own or produce any wealth.
Taking the money from the Big brother to give to the little
brother is not action but pure stealing.
Here are the points;
[list type=decimal]
[li]The Economy is significant and central to people, especially
new entrants[/li]
[li]The people who control the economy are the Investors,
producers and consumers[/li]
[li]The Government should stay away from the economy, unless it
is either Investing, producing or consuming of real value (not
building Pyrmaids, Fountains or Bridges to nowhere) [/li]
[/list]
Investors, Producers and Consumers
What impacts Investors, Producers and Consumers?
It is a bit like the Chicken-Hen story.
Which came first? Investment, Production or Consumption?
It is now common knowledge that when Governments are faced with
economic recession they then pump money into the economy by what
is called as "stimulus." This is called as Keynesian Economics.
Which the right opposes, because of inflation as well as
reduction of the value of the dollar, and they are correct to
some extent.
Stimulus is like a potter and his wheel. The potter kicks the
wheel initially, and the wheel starts spinning. After sometime
the wheel loses its energy and the potter kicks the wheel again.
This is ok as long as the energy spent in kicking the wheel
comes back to the potter as value, that is, in the form of a
finished good, which he can sell and earn money. Thereby making
the entire transaction positive and profitable.
Now ask what finished good does a deficit spending program
produce in the end? Nothing. All we would have done is
overproduced and oversupplied the market with something that it
does not need. This now results in a double-whammy. Om one hand
is the inflation of goods in demand like food etc, and on the
other hand you will have warehouse full of unsold merchandise,
which producers then sell it at a loss.
My point is, if the economy shrinks, let it shrink, and if the
economy is heating up, let it get hot. And it is not that it is
not the governments business to interfere, but it is more to do
with the ill effects of artificial and forced intervention.
By intervention, I mean (1) subsidizing, (2) incentivising, (3)
Price Control.
Instead, what the government can do is to (a) Invest, (b)
Produce, (c) Consume, but then not for the sake of doing things,
but find real value. For e.g. the building of homeless shelters,
the end product is a social value and its ok.
But not the Calgary LRT Greenline, because the cost versus
benefit ratio of this project is not the same as building
homeless shelters. Moreover, think where mjaority of the funds
invested in a greenline go? to some European countriy that is
making the locomotives, and not just a loonie or toonie, but
hundreds of millions.
The Government can invest in its people. For e.g. Alberta has a
Truck driver shortage, and there are so many people who want to
become truck drivers, but they do not have the $20,000 required
to train. At the very least the Government can atleast loan them
to people. See, the money will never go waste, because there is
a high likely hood that the guy who took the money will drive
the truck (and thereby helping the trucking companies to produce
more). Even if the guy quits driving, the money had gone to the
truck driving school, which will now circulate within our
economy (except for the poker rake effect)
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