Posted by OSU_Buckeye on 6/14/2012 10:53:00 AM (view original):
This is looking more and more like, we're dealing with an under 21 yr old that thinks he understands, but knows nothing.

I think he's over 21, but he puts way too much faith in blogs he reads on the internet.

And, as most people who take two seconds or more to think about it know, the vast majority of politically-oriented blogs are written by people with agendas.  Distorted or cherry-picked facts to back the opinions and agendas of the bloggers.

Posted by tecwrg on 6/14/2012 10:49:00 AM (view original):

Posted by jrd_x on 6/14/2012 10:29:00 AM (view original):
Wouldn't getting that money moving increase demand for products and services, putting people back into jobs?

(Cueing the them from "Jaws")

For individuals and small businesses, I would think that the demand for products and services would be mainly driven by having more money in your pocket to spend, along with having less concern about the need to save because the economy's in the shitter.

It's Main Street, not Wall Street.

I'm talking about overall, for the entire economy, wouldn't you agree that money moving around in the economy helps create demand, whereas, money sitting still doesn't?

It's always easier to deal in generalities than specifics, isn't it?

Specifically, what do you mean by "money moving around in the economy"?

I've already told you what creates demand.  Please explain to us specifically  how "money moving around in the economy" creates demand.

Ok, specifically, Company A has $1 million in liquid assets.  Is it good for the economy if that company uses some (or all) of that money to buy new equipment, rent more space, hire more employees? Or is it better for the economy for that company to let that money sit in a bank account?

(Ignoring, for the moment, what any of us think is actually better for the company)

OK.  How does that create demand?

You don't think the company buying equipment, leasing space, and hiring employees creates demand?

It doesn't create consumer demand.

Posted by tecwrg on 6/14/2012 12:31:00 PM (view original):
It doesn't create consumer demand.

Buying equipment is creating demand for companies that manufacture, sell, and service equipment.  Leasing/buying space creates demand for real estate companies, maintenance companies, and property management companies.  Hiring employees creates demand by giving employees paychecks to buy things with.

That business using that million dollars creates demand.  That business letting that million sit in a bank account doesn't.

Your argument completely ignores the consumer and small businesses.  Mom and Pop businesses that get by on a shoestring.

This discussion started when you claimed that a rise in inflation would be good for the economy.  A couple of us pointed out that a rise in inflation generally causes hardship to some degree to both consumers and small businesses.  Consumers and small businesses are an important part of the economy.  You've failed to address that.

I'm getting there.  But we have to agree on several points first.

Do you now agree that that million dollars being used by that company helps increase demand and therefore helps the economy?

Only in a very narrowly defined way.  Proceed.

Posted by tecwrg on 6/14/2012 12:55:00 PM (view original):
Only in a very narrowly defined way.  Proceed.

Wait, what???  How is it narrowly defined?

That company spends that money on products and services provided by other companies (many of whom may be small businesses) and hires employees, which puts money in the pockets of individuals to go out and and buy more stuff, presumably from at least some small businesses, who now have sufficient demand to hire more employees, buy more equipment, lease more space, etc, etc.

Handing that money out in $100,000 increments to 10 poor people would also create momentary demand.    But 10% inflation affects everyone else.

Posted by MikeT23 on 6/14/2012 1:02:00 PM (view original):
Handing that money out in $100,000 increments to 10 poor people would also create momentary demand.    But 10% inflation affects everyone else.

A business (or government) handing out cash like that certainly would create demand.

We're getting to the inflation part, but it may take years if tec is going to argue that a business spending capital doesn't help the economy.