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  • Put Your Hands Together!

    2obama_clapping090204.jpg

    Buried in a January 7th Heritage WebMemo by J.D. Foster and Bill Beach is this passage explaining in careful logic via eloquent metaphor the nature of, and reasons for, economic growth:

    The American economy does not rise and fall with the level of aggregate demand or deficit spending. Further, government cannot simply pump up total demand through deficit spending. The deficit for 2009 is already projected to exceed $1 trillion, so if deficit spending were effective, the economy should already be poised to take off.

    Yet the economy is contracting despite these unprecedented deficits because government spending in excess of tax revenues will be financed by borrowing from the private sector, which deprives the private sector of a like amount of purchasing power. In short, deficit-financed government spending goes up and private spending goes down, changing the composition of demand but not the total.

    Focusing on demand in this way is like focusing on the sound of one hand clapping. The other hand is supply, and that is where the economic action really is. There are normal processes that launch a recovery and drive an economy. These processes involve individuals and businesses responding to opportunities and incentives. When they respond, these individuals and businesses produce more goods and services valued in the marketplace, simultaneously increasing production, demand and income. An effective stimulus policy recognizes these economic processes and seeks to accelerate them. Lower marginal tax rates stimulate the economy because they improve the incentives facing individuals and businesses to work, invest, take risks, and seize opportunities.

    Yes, “An effective stimulus policy recognizes these economic processes and seeks to accelerate them,” not use devious blitzkrieg tactics to break the line for social agenda while calling it ’stimulus spending.’

    Posted in Ongoing Priorities [slideshow_deploy]

    6 Responses to Put Your Hands Together!

    1. Barb -mn says:

      So all in all, the vast business of government steals taxdollars to conduct their business no matter how brainless the job. CAPITALISM DOES NOT STEAL. Their choices are based on their abilities to make their final decision according to THEIR CAPITALIST REVENUE. THEY EMPLOY WITHOUT STEALING FROM OTHERS. Government thinks of a brainless job and whoola, higher debt, higher poverty. The responsibilities the government took on leaves them irresponsible with no way to live up to the responsibilities they take on.

      Lets understand, poverty is not with those that get their free house, free education, free medical, free food, free day-care, programs to pay utility bills, etc. they’re not in poverty, the ones struggling with no hand of government stealing the hard earned income of us ARE IN POVERTY…

    2. Travis Gearhart, Hebron, IN says:

      Anyone out there who disagrees with anything in this article needs to go to their local library and pick up an Economics 101 book. I have been doing a whole lot of reading on this issue because to be honest, I didn’t have the slightest idea about supply and demand or anything else. I work in the steel industry, and it’s amazing the amount of people that are looking at this stimulus package like it’s a saving grace, or a majic wand. I appreciate people like you, Mr. Lansing and if you or anyone else out there reading this has some spare time please check out my website at http://www.mattersofopinion.net . I’m trying to get people involved and aware of flaws in the Democratic Congress and President Obama’s plans for the future of our private sector and tax paying Americans alike.
      If your interested it would great!
      Travis Gearhart

    3. Mike - NC says:

      I had to read through this a couple of times beacuase of my limited knowledge of economics, but this makes great sense to me.

      Thanks, I'll chew on this for a while…

    4. Marshall Hill-Michig says:

      The average Taxpayer is holding back because of fear,that they will be taxed at a higher rate.So

      Common sense tells me that we need to make some

      permanent Tax Cuts, that consumers can look at and

      Plan their spending in a sensible manner! People

      know that robbing Peter to Pay Paul has no future!

      Obama has other Plans for any that will follow

      his Charade to oblivion as the new base of Socialism!If we were privy to his Personal

      Blackberry that he said he needed "so my Children

      can reach me at any time!" If you believe this is

      his purpose,I have a Swamp FOR SALE!William Ayres,

      Rev. Wright and Tony Rezko can reach him at any

      time to direct the Puppet!

    5. Anita, Tyler TX says:

      I agree with Marshall Hill and it becomes even harder when you're retired and living on a fixed income that keeps getting smaller and smaller every year….I can't even afford a Blackberry!

    6. Martin S, New Jerse says:

      This whole absurd mess makes my leg tingle…………

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