Well, it does not matter where the money go to , as long as it did not go to the manufacturers who need the money to improve the products, expand the capacity , and upgrade the factories to improve the productivities, it will hurt the economy. By hiking the rate, the price for commodities was artificially lift up , while the additional money did not go to the manufacturers, but either the government the banks or whatever.
You probably came from the 19 century where at that time we do not have unlimited capacity of production, and such efficiency as today.
Think about the cars, nowadays , most of the factories used robatics to assembly cars, to meet the demand, if we like , we can let the robatics work 24 hours a day, 365 days a year to increase the production without really increase the cost a lot, we do not pay the robatics . That is why we do not have a inflation problem under the current strong economic growth. twenty years ago , the majority hired in the corp are to do paper work, nowadays, due to the available of computer and efficient software, only thre or four people today can complete the same amount of paper work which need 40 to 100 people 20 years ago. Is this the improvement of productivity or what ? |
