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  #21 (permalink)  
Old 05-26-2008, 09:28 PM
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Spending will not solve the economical problems. Spending increases cash flow and increase inflation, so the value of money comes down.

So, for the economy to stay strong, spend when it is absolutely necessary and postpone spends on what you can afford to wait.
 
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Old 05-26-2008, 10:43 PM
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It's the budget for a pro America AdWords campaign - That's what I heard anyway ;-)
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Old 05-27-2008, 05:59 AM
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When you increase consumer spending you increase tax revenue without the need to increase taxation itself, this gives the government more money. Handled correctly, as we all know it won't be, to many roosters in the hen house, but handled correctly you decrease the national debt with the increased tax income. Pretty simple stuff, I have no clue where someone gets the idea that spending causes inflation....inflation is an entirely different creature and has to do with increased income forcing increased cost causing the dollar value of an item to increase in comparison to it's past but not be of significantly change value. i.e. when a car when steel manufacturers are paying it's avg. worker $10 per hour at some point in time in the past, then sells it's steel to the auto manufacturer at a price that permits acceptable margin to auto manufacturers that are in turn paying their avg employee $10 that in turn sells the vehicle to the wholesaler that pays their sales people by commission for at the price of at that time I think the avg was what $8,000-$10,000 to people that make a minimum wage of $1.75 an hour or something like that, memory is starting to fail me at this point.........but when you multiply that times 2, the workers are getting $20 per hour the minimum wage goes to $3.50 and the cost of the raw materials double so the cost of the vehicle throwing in increased safety and emission demands from lobbyists the cost of the vehicle goes from $8,000 to $18,000........that's inflation same vehicle, same value, different cost but with everyone at an increased rate of pay not a huge difference in anything except sound....
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Old 05-27-2008, 11:17 PM
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Originally Posted by thegamerslink View Post
When you increase consumer spending you increase tax revenue without the need to increase taxation itself, this gives the government more money. Handled correctly, as we all know it won't be, to many roosters in the hen house, but handled correctly you decrease the national debt with the increased tax income. Pretty simple stuff, I have no clue where someone gets the idea that spending causes inflation....inflation is an entirely different creature and has to do with increased income forcing increased cost causing the dollar value of an item to increase in comparison to it's past but not be of significantly change value. i.e. when a car when steel manufacturers are paying it's avg. worker $10 per hour at some point in time in the past, then sells it's steel to the auto manufacturer at a price that permits acceptable margin to auto manufacturers that are in turn paying their avg employee $10 that in turn sells the vehicle to the wholesaler that pays their sales people by commission for at the price of at that time I think the avg was what $8,000-$10,000 to people that make a minimum wage of $1.75 an hour or something like that, memory is starting to fail me at this point.........but when you multiply that times 2, the workers are getting $20 per hour the minimum wage goes to $3.50 and the cost of the raw materials double so the cost of the vehicle throwing in increased safety and emission demands from lobbyists the cost of the vehicle goes from $8,000 to $18,000........that's inflation same vehicle, same value, different cost but with everyone at an increased rate of pay not a huge difference in anything except sound....

Inflation is a reduction in value of money and it can happen due to several factors. As you pointed out, increase in income. But increase in spending can also cause inflation. Because there is an (in)famous demand-supply pricing policy - once the spend (demand) increases prices will go up and so will be inflation.
 
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Old 05-28-2008, 12:31 AM
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Originally Posted by viswablr View Post
Inflation is a reduction in value of money and it can happen due to several factors. As you pointed out, increase in income. But increase in spending can also cause inflation. Because there is an (in)famous demand-supply pricing policy - once the spend (demand) increases prices will go up and so will be inflation.
Aren't you leaving out a factor in that formula though? You have to have an increase in demand without any increase in supply for that scenario. In other words increased demand but stagnate production.....if production is based on demand as it should be, and in most businesses usually is, then it will keep itself in check unless there is something that tips the scale. Controlling spending is something that would tip the scale(causing surplus supply hence plummeting product value hence company margins/income would drop hence employee income/employment would diminish or disappear or the adverse which is no better), so would controlling supply(price fixing, just leave it at that)....

so unless you attempt to control spending or attempt to control supply neither will have an immediate effect on inflation without an external force. So telling people to stop spending money in order to impede inflation is a misguided statement.
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Old 05-29-2008, 11:06 AM
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Thats right folks, a proposed THREE TRILLION DOLLAR budget. What gives?
Americans are just crazy! (and i dont think we europeans are a **** better)
 
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