Wednesday, October 5, 2011

Steve's barking at the integrated US economy

Guess what, were a mixed economy nation.
Government spending,  private enterprise, and agriculture.
What would happen if one side was to reduce its output. (Government has an output)?
It would hurt the out put of the other the other two parts of the economy.
We would have an output deflation.
While this may have bring on monetary deflation, there is a good chance that this would bring on price inflation. 

Huh what was that paragraph all about?
The United States is heavy on government spending, if it is reduced by cutting workers, or cutting money to the private sector my logical way of thinking is that the private sector is in serious trouble.
The same is true if the private sector stops hiring and stars firing, the public sector is in serious trouble.
If we don't help farms out, with subsidies my way of thinking is in the short run the price of agricultural goods might go down, but in the long run a majority of farms would go out of business and will start having to compete with other countries for there agricultural products.

If a company can't make a profit it will produce less, while other companies that at one time were producing the same product will be out of business, there by forcing the price of those manufacturing goods to go up. (Price inflation).

OK
Still nonsensical?
What else can I say?



             

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