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Politics : Idea Of The Day
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To: IQBAL LATIF who wrote (45557)1/28/2004 1:46:36 AM
From: IQBAL LATIF  Read Replies (1) of 50167
 
Spending Patterns and Economics

I'm curious about the opposition towards Bush's spending policies in the sense that I think that they are perfectly well-timed. I may not be a government interventionist but there are certainly times when it is critical for the government to intervene in the economy and help to stabilise it. The deficit spending of America may have very well helped to stem deflation since it injected liquidity into the system and at any rate it is perfectly sustainable in that it's counteracted by an extremely high rate of economic growth. Spending increases, which are more than matched by high economic growth rates, will inevitably mean that the debt as a proportion of the GDP will inevitably lessen.

I find myself increasingly disagreeing with Gordon Gecco's (and adhered by the Democratic left) statement in the Wall Street, "it's a zero sum game". As someone with a partiality for Austrian economics I can see the economy not so much as a cyclical but a continually expanding phenomenon. Fundamentally to conceptualise economics one must reduce it irreducibly and thereupon formulate convictions that are in accord with the prevailing logic and rationale.

For instance the sum of the economy will ultimately be the raw materials and natural resources. The secondary phase of the economy is tranforming these goods to their potential (productivity is the continual improvement in speed, efficiency and cost in the conversion process) whilst finally services are the extent to which these are diffused and traded throughout the system. The key economic revolutions may have been the technical advances of production but it was the liquidity generated by leveraged borrowing, equity raising and financing that allowed for sustained economic growth to begin from the 19th century. I was reading a week ago about the European continent and its historical epoch, I am ardently trying to recall a particular passage but am unable to do so, but it went along the lines of how the shift from agarian to urban civilisation in the Renaissance and medieval times produced a perceptive shift in that Europeans, unlike other civilisations, began looking towards the future as opposed to harping about the past.

Will be continued.
Zachary Latif 08:31
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