Wednesday, October 20, 2010

Econmy 101

Here is my rant (from my post on Broken Toys)

The government can build a bridge to no where, and temporarily show some benefit, but that is bad and it be getting bad things.

It is has almost the same effect of print money and give to people (with the added disadvantage of wasting raw material and generate greenhouse gas). When you build stuff people don’t want with “stimulus”, you create inflation, people will find their money doesn’t worth as much any more.

Again, as I can’t stress enough, wealth is created. You create wealth by produce things people want, and the only way to benefit poor people is by increase productivity, so things get cheaper (the best example is food, much less people get hungry today than 100 years ago because of the leap in farm productivity).

Government spending can temporarily jump the economy, but it will never be long term and worst of all if people started to depend on it, you create a tumor that will just keep getting bigger.

As a matter of historical fact, check the 5 year plans of Soviet Union and Culture revolution of China. Do you know how many people died of hunger during the failed government economy pushes? Millions.

So less Taxes, more productivity. Let the Rich get richer, as long as the poor gets richer too.

No comments: