Hello everybody! This is Alex Merced, and this is another one of my discussions about economics. And I am also discussing more currency issues and credits and stuff like that. I have decided to in light of elections, elections going on this year in 2008, and elections that are on other years, it always comes down to a battle between sort the conservative, the non conservative but republican side, supplies at economics, and then the Keynesian liberal democrat, take all of that with a spoon full of sugar, but in demands at economics.
And the thing is that, these are both, upsurge looks at economics. The reason is that it looks at economic -- each one looks economics as a one sided battle. As I discussed before, supplying the men, are two sides that co-exist and when they, when you let them do get out, you get market prices, which is a price where you have the supply, which is the producers, the company. The cost they used to produce, agrees with the demand side, these are the consumers who have jobs and who have disposable income.
But what happens, when you feed into one side but not the other, this is a way you have these two economic theories that just don't work. You have the supplies at economic which has possibility that I approve in the sense of lowering taxes and lowering cost to do business. The thing is that, it's so concentrated on supply side, in the sense, when you decrease cost to companies, and then give them more capital to use, of course they will be able to produce more. As you increase the supply, prices get lower.
And so the goal there is to lower prices so people are more wealthy which works in the sense, but then again, as prices get lowered and Company's fields get lower, wages get lower which is fine long as you have a corresponding battle between the demand and supply. But you can't lop it on one side.
You will also need to reflect the demand in the sense, lowering taxes, so that consumers have more expendable income to consume the increase production. So you have to tackle the size, and then you have to demands at economics, sort of Keynesian economics, which poses -- I heavily disapprove of because it puts the burden of manipulating the economy on the tax payer. The way it does this is by increasing new government programs to create new jobs with higher wages.
And by giving more jobs at higher wages, all these people who take these jobs now have more expendable income, theoretically to spend on the current supply. So what that does is, since the demand is up, but the supply has been manipulated prices sky rocket and they also sky rocket due to inflation which is a by-product of increased government spending, Federal Reserve manipulation, etc.
So you create all these new jobs, especially government jobs which aren't jobs in production. So now you have all this labor going into government jobs, which necessarily aren't productive and they are not producing goods, they are not necessarily producing wealth. So what you are doing is you are manipulating market, taking a resource of labor to which could be used to produce wealth and new products and new services.
Take out resource and you increase demand, and without the labor to create, to produce, to meet this new demand, you have increased prices. So then in turn you have more increased wages, which again puts a heavy burden on the tax payer. But in the reality these new jobs, these people with new jobs and all people who have job fired, actually don't have the expendable income that they seemingly would have increased due to increases in taxes, and attracts revenues due to, to keep these policies fluid.
So basically, you have -- demands at economics will increase price as well, supplies at economics would decrease prices, but they are both on one side of theories. What you need to do is to have a level plain field, and you have a room where consumers have their wages, they have their money. If they work, they should have their money.
If someone is working in a factory there, they should get their paycheque, so they can take care of their family and take care of whatever. Also you need -- but you also need companies to be able to spend as they want, so that when they -- they would be more willing to invest in research and development. And the more money a company has, the more they would be willing to do so which creates innovation, which will create conveniences which actually increase the standard of life.
The standard of life is not increased necessarily by the wages, by the level of technology in the consumer goods available to them. Remember production is the key to wealth, in a sense. But in order to keep the production of new goods and wealth fluid, you need to have a sound monetary policy, which goes to those things I taught back before. But again, demands at economic, supplies at economics absurd, there are both only half if that pieces to a puzzle, and when you listen to the politicians, discuss the policies that I have outlined in this segment, think about it.
Transcription by:
Scribe4you Transcription Services