Skip to main content

The economy of a country consists of all the exchanges of goods and services as well as all the production of goods in the country.  The economy is not the performance of the stock exchange; that is simply the whims of investors, and whether they decide to invest in domestic or foreign companies.  And more and more on the short-term decisions of computers to small changes in the price of stocks.

When I read something to this effect in The Girl With the Dragon Tattoo I realized what is wrong with all economic reporting that I see.  We look at shortterm indicators of economic well-being without considering what is needed for true economic well-being.  

So here are some thoughts.

You cannot run a government like a business or a family budget.  Why not?

Because a family in hard times pares back its spending, particularly on extras - fancy food, eating out, entertainment and such.  This takes money out of the general economy until the family situation improves.  But taking money out of the economy only continues the difficulty.  Because a smart business looks first to long-term growth, and in hard times pares profits for things like capital investment.  The trouble with large corporations is that they continue in hard times to invest in executive salaries and shortterm profits rather than looking to the future, and maximizing profits ultimately takes money out of the economy as well (think layoffs, for example).

So during hard times, both businesses and families take money out of the economy, which would make hard times harder.  

With both the private and business sector taking money out of the economy, the only sector left to put money into it is the government.

A government, therefore, has to respond to hard times with more, rather than less, spending.  It must do this to keep the exchange of goods and services at a manageable level.  That is why assistance to those in need continues to be an important part of any attempt to improve a lagging economy.  So are direct capital investments.  What makes the capital of a government?

Infrastructure and people.

Therefore the government should be putting more money into investment in its people by putting money into such things as health, education, and welfare.  A healthy and well-educated populace will return such investments by being productive and adding to the economy and to government via taxes.  Putting people to work building infrastructure adds to the overall productivity of the economy by creating jobs for the unemployed and schools, roads, and other things that support a recovering and recovered economy.

Introducing conservative policies that emphasize balancing budgets and responding to hard times with greater government austerity is crashing the world economy and adding to the problem rather than fixing it.

The Republican budget proposals would continue to take money out of the economy.

Do you think things can't get much worse?  Wait and see.  I have been disappointed in this president, but plan to give one of my tiny contributions to his campaign next month.  I am more and more frightened by the alternative.

Who'd have thought compassion was good business?

Originally posted to ramara on Sun Jul 29, 2012 at 02:11 PM PDT.

Also republished by Community Spotlight.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site