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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (92559)	9/4/2018 3:30:02 PM
From: combjelly	Respond to of 365739

I and i-node have had this discussion for at least a decade. Probably more.

To: Steve Lokness who wrote (92559)	9/4/2018 3:46:04 PM
From: i-node	Read Replies (1) \| Respond to of 365739

>> Consumption drives growth. Entirely, 100% wrong. See below . But a simple example is worthwhile (all amounts are in today's dollars). ON the first day of January, $20 Trillion were in the hands of Walmart and Amazon leaving zero dollars in the hands of customers. This includes all money in circulation and pretty much all of the current US debt on the balance sheet. No one could afford to buy products. Seeing no alternative, Amazon and Walmart order $20 Trillion [cost] of goods were ordered and placed into inventory over a period of a month. At the end of the month, almost all Americans had starved to death because Amazon and Walmart only pay at end of month, and as a result could not buy the goods put into inventory. To summarize, $20 Trillion in stuff was "made" and put in inventory, but little if any was sold to consumers. The question is, about how much much would GDP be at December 31, given there is no consumption to drive growth, or minimally so) for the $20 Trillion in merchandise? ============================ "As John Stuart Mill put it two centuries ago, “the demand for commodities is not the demand for labor.” Consumer demand does not necessarily translate into increased employment. That’s because “consumers” don’t employ people. Businesses do. Since new hires are a risky and costly investment with unknown future returns, employers must rely on their expectations about the future and weigh those decision very carefully. As economic historian Robert Higgs’ pioneering work on the Great Depression suggests, increased uncertainty can depress job growth even in the face of booming consumption. As recent years have demonstrated, consumer demand that appears to be driven by temporary or unsustainable policies is unlikely to induce businesses to hire." - Forbes