To: RetiredNow who wrote (757464 ) 12/13/2013 3:24:20 PM From: Bilow Respond to Hi mindmeld; Re: "As I say all the time, free markets work far better than a centrally planned economy. In all of economic history, free markets have always created far more wealth and jobs over the long run than any centrally planned economy. " I agree.So the Fed is trying to sell us all on the idea that they can manipulate the price of money and bonds in order to create more growth and jobs. Well, maybe in the short run that might work, but it will always create excesses and bubbles in other areas that will deflate horribly. "The net net of central planning is always worse than the net net of free markets. That's what history tells us. ";A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a public body such as a government agency. [1] [2] Although a planned economy may be based on either centralized or decentralized forms of economic planning , it usually refers to a centrally planned economy . Central planning aims to improve productivity and coordination by enabling planners to take advantage of better information achieved through the consolidation of economic resources when making decisions regarding investment and the allocation of economic inputs. Planned economies are held in contrast to unplanned economies , such as the market economy and proposed self-managed economy , where production, distribution, pricing, and investment decisions are made by autonomous firms based upon their individual interests rather than upon a macroeconomic plan. Less extensive forms of planned economies include those that use indicative planning as components of a market-based or mixed economy , in which the state employs "influence, subsidies, grants, and taxes, but does not compel." [8] This latter is sometimes referred to as a "planned market economy". [9] In some instances, the term planned economy has been used to refer to national economic development plans and state-directed investment in market economies. Critics of planned economies argue that planners cannot detect consumer preferences, shortages, and surpluses with sufficient accuracy and therefore cannot efficiently co-ordinate production (in a market economy, a free price system is intended to serve this purpose). This difficulty was notably written about by economists Ludwig von Mises and Friedrich Hayek , both of whom called it the " economic calculation problem ". These opponents of central planning argue that the only way to satisfy individuals who have a constantly changing hierarchy of needs, and are the only ones to possess their particular individual's circumstances, is by allowing those with the most knowledge of their needs to have it in their power to use their resources in a competing marketplace to meet the needs of the most amount of consumers, most efficiently. This phenomenon is recognized as spontaneous order . Additionally, misallocation of resources would naturally ensue by redirecting capital away from individuals with direct knowledge and circumventing it into markets where a coercive monopoly influences behavior, ignoring market signals. According to Tibor R. Machan, "Without a market in which allocations can be made in obedience to the law of supply and demand, it is difficult or impossible to funnel resources with respect to actual human preferences and goals." [17] en.wikipedia.org
