keeps hearing the claim that the economic crisis that so many companies preparing sales difficulties for their products would have to be the state and citizens allegedly "anti-cyclical" behavior and spend more, consume, therefore, to support the demand. These politicians just about any means is justified: The instrumentation ranges from the reduction in interest rates to zero to establish credit to make it as cheap as possible, on the introduction of minimum wages, and higher child benefits, not to forget the unfortunate economic stimulus package II Unfortunately, nothing is more durable than that only at first glance plausible consumption myth, which proves to be but in fact, on closer inspection as a dangerous delusion: could would
apply if the view, and a recovery of consumption (by the unions also often called revival of "domestic demand") result in an economic upturn, we need all this richer, as we consume as much as possible, so spend our money, instead of saving. As always with economic myths, many of which go back to John Maynard Keynes, who was refuted in his own lifetime frightening clearly lacks a comprehensive consideration of all impacts associated with an increase in expenditure of public and private households. Henry Hazlitt, the 1993 deceased business journalist and long time companion Ludwig von Mises said, in his book "Economics in One Lesson" in the context of a typical error that lies in the consequences of a measure not only one but for all groups, So to consider the entire economy.
State, based more deficit spending the demand on tax increases, it's all about a redistribution of capital. said As Ludwig Erhard: ". Any additional expenditure of the state is based on a waiver of its citizens" The resources that are consumed by private households or companies, savings or investments would be passed on to the state, which then provides for a redistribution, usually of the supposedly rich to the poor and supposedly from the childless to the children's rich. Ludwig Erhard described this policy as "truly grotesque condition that we pay all the taxes first and then all the queue, and finally by the state (...) our own funds recover." In fact, this shows Policy was unilateral effects: it leads in the taxable income recipients, businesses or property owners to reduce the profits or assets and in this way minimizes the dedication. Additional jobs are not created, instead, are holdings abandoned or relocated abroad. While the losses are large for the taxpayers, is the gain in the "recipient" per capita is extremely low and there is barely acknowledged or compensated for by job losses. In the end, loses the entire economy, but the worst are just the "most vulnerable" affected. Here, the "redistribution losses" are misallocation and abuse offenses that any state intervention policy is inherent not even considered. The myth turns out to be so stimulating as a sleight of hand, with which something is conjured from the left into the right pocket.
How does the state the money for additional spending for consumption recovery, unless he wants to raise taxes? The methodology has been refined in the meantime. It is printed in the meantime not just more paper money. Governments create money at a stroke, for example by increasing the loan amount. Nothing else happens when central banks cut interest rates below the actual market rate or government spending, for example, economic measures Revival of construction financed through new borrowing. If the money supply is increased, whether by book or real money supply, reduces the purchasing power is automatically a unit of money, so prices rise. The Evil of the inflation-based "economic recovery" is the fact that the new money is not distributed evenly, but first in the state-preferred industries, such as the construction industry flows. When the cash flows also arrive elsewhere it is usually too late, because the prices have already increased considerably.
True values were also obtained by this consumption increase is not naturally created. Real capital formation is only by consumer spending, thus saving possible, which also leads to a decline in natural market rate and to facilitate credit-financed investment, because lending rates fall due to the saving. Likewise, the unemployment that emerged in the crisis by increasing corporate defaults, can be overcome only through education of new, real capital stocks. A decline in consumption would be indispensable to worry about real conditions for a recovery after the crisis. A balance would be set back by itself: the unused money would be saved, thus allowing a natural way to lower the lending rates to facilitate investment. Instead, it is long term but to stagflation, because the monetary expansion is the view of the Keynesian macroeconomists also allow for wage increases, but can simultaneously increase the sales prices of the companies to turn enable a profitable rehabilitation of the unemployed can. The unions can not outwit, but demand in addition to "normal" wage increases, of course, a regular post adjustment with one. The result of this policy is stagflation, ie high unemployment coupled with high inflation, a phenomenon which we could see disastrous, particularly in Germany and France, two countries with very powerful unions, the last 30 years. A truly anti-social policies with disastrous consequences, especially for the poorer sections of society.
apply if the view, and a recovery of consumption (by the unions also often called revival of "domestic demand") result in an economic upturn, we need all this richer, as we consume as much as possible, so spend our money, instead of saving. As always with economic myths, many of which go back to John Maynard Keynes, who was refuted in his own lifetime frightening clearly lacks a comprehensive consideration of all impacts associated with an increase in expenditure of public and private households. Henry Hazlitt, the 1993 deceased business journalist and long time companion Ludwig von Mises said, in his book "Economics in One Lesson" in the context of a typical error that lies in the consequences of a measure not only one but for all groups, So to consider the entire economy.
State, based more deficit spending the demand on tax increases, it's all about a redistribution of capital. said As Ludwig Erhard: ". Any additional expenditure of the state is based on a waiver of its citizens" The resources that are consumed by private households or companies, savings or investments would be passed on to the state, which then provides for a redistribution, usually of the supposedly rich to the poor and supposedly from the childless to the children's rich. Ludwig Erhard described this policy as "truly grotesque condition that we pay all the taxes first and then all the queue, and finally by the state (...) our own funds recover." In fact, this shows Policy was unilateral effects: it leads in the taxable income recipients, businesses or property owners to reduce the profits or assets and in this way minimizes the dedication. Additional jobs are not created, instead, are holdings abandoned or relocated abroad. While the losses are large for the taxpayers, is the gain in the "recipient" per capita is extremely low and there is barely acknowledged or compensated for by job losses. In the end, loses the entire economy, but the worst are just the "most vulnerable" affected. Here, the "redistribution losses" are misallocation and abuse offenses that any state intervention policy is inherent not even considered. The myth turns out to be so stimulating as a sleight of hand, with which something is conjured from the left into the right pocket.
How does the state the money for additional spending for consumption recovery, unless he wants to raise taxes? The methodology has been refined in the meantime. It is printed in the meantime not just more paper money. Governments create money at a stroke, for example by increasing the loan amount. Nothing else happens when central banks cut interest rates below the actual market rate or government spending, for example, economic measures Revival of construction financed through new borrowing. If the money supply is increased, whether by book or real money supply, reduces the purchasing power is automatically a unit of money, so prices rise. The Evil of the inflation-based "economic recovery" is the fact that the new money is not distributed evenly, but first in the state-preferred industries, such as the construction industry flows. When the cash flows also arrive elsewhere it is usually too late, because the prices have already increased considerably.
True values were also obtained by this consumption increase is not naturally created. Real capital formation is only by consumer spending, thus saving possible, which also leads to a decline in natural market rate and to facilitate credit-financed investment, because lending rates fall due to the saving. Likewise, the unemployment that emerged in the crisis by increasing corporate defaults, can be overcome only through education of new, real capital stocks. A decline in consumption would be indispensable to worry about real conditions for a recovery after the crisis. A balance would be set back by itself: the unused money would be saved, thus allowing a natural way to lower the lending rates to facilitate investment. Instead, it is long term but to stagflation, because the monetary expansion is the view of the Keynesian macroeconomists also allow for wage increases, but can simultaneously increase the sales prices of the companies to turn enable a profitable rehabilitation of the unemployed can. The unions can not outwit, but demand in addition to "normal" wage increases, of course, a regular post adjustment with one. The result of this policy is stagflation, ie high unemployment coupled with high inflation, a phenomenon which we could see disastrous, particularly in Germany and France, two countries with very powerful unions, the last 30 years. A truly anti-social policies with disastrous consequences, especially for the poorer sections of society.
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