Supply And Demand Articles And The US Economy Heroin Addiction

Saturday, October 15, 2016

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Supply And Demand Articles

There used to be an era in which a strong economy resulted in a strong stock and real estate market. Now, real estate housing and the stock market seem to rally regardless how well the economy does. The central bank baby pouch seems to offer life support have made our times into a fiesta. Supply and demand articles from the media signal out a jobless recovery but a recovery is not a real recovery without jobs.

Although common perception seems to be running at all-time highs, eventually we are going to have to pay it all back. The idea that an economy could borrow without end while expecting good times ahead seems very misleading. At some point we are not just going to have to pay back the principle of our debt but also the interest on it. At a time when about a third of our revenue goes to interest payments, it seems unpredictable to calculate how accurate it will be able to cover those interest payments costs in the future even more so when we have no spare productive capacity and our industries are bleeding with heavy taxation and regulation.

Over 60% of the free money that sustains our bloated government spending comes from the Federal Reserve via bond and collateralized mortgage backed securities purchases. Since Obama took office our national debt has almost doubled from ten trillion to almost 17 trillion dollars, nearly doubling it in nearly 5 years what took centuries since the birth of the republic. Both congressional parties seem agree that either raising taxes or decreasing spending are out of the discussion table. So the only two remedies in dealing with our debt are borrowing and inflation. As we have seen in recent years, both parties have a track record of raising the debt ceiling and opting out for more borrowing and spending to solve our debt problem.

Supply And Demand Articles: America’s Desperate Resolve For Survival

Mainstream economists supply and demand articles will point out the dangers of deflation, or contraction of the money supply with decreases in consumer prices, and will even go as far as suggest that in fact more inflation is needed to prop up our economy. Perhaps they are right up to a certain extent in that our economy is addicted to stimulus money from the central bank the same way a heroin addict needs higher doses of heroin the keep the party going. These Keynesian economists will go farther to make the statement that at least a two percent inflation target is needed to prevent people from postponing their spending and purchases. But their logic is flawed from inception. Will someone not buy 0 dollars in food today because it might decrease 1% in a year from now?

“Supply and demand articles” from news outlets and mainstream economists do not point out that an economy grows by production, under-consumption and savings. These savings turn into capital to finance projects which in turn create jobs and improves a country’s standard of living. While ninety five percent of the articles condemn deflation, it is inflation that destabilizes an economy by misallocating resources to where they could be better utilized. The same people whose logic led to the financial crisis are leading us again out of it. Our government, the biggest debtor in the history of the world supports inflation as a way to pay for its wasteful spending and expansion. Sooner or later we will come to realize that it is not wise to spend money to get out of debt but instead resort to discipline, savings and production. If you are looking for other “SANE” supply and demand articles then I suggest you go here for more quality resources.

Did you enjoy our supply and demand articles economic review on inflation and our current state of the economy? Then you are welcome to leave a comment and share where do you think we are headed for the coming months and years.
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