Demand for goods and services

economics 101We were sent here to reduce spending and government…–Tom Reed, Feb. 28, 2011

We need to stop this mentality that we can borrow and spend our way out of the recession. —Tom Reed, Sept. 19, 2012

…our debt has grown to the point where it now totals $17 trillion dollars, or approximately $55,000 per man, woman and child in America. Think about that: for each baby born today, he or she draws their first breath in America owing over $55,000 in debt.–Tom Reed, Oct. 30, 2013 (Tom knows no individual owes any part of the national debt, but he repeats this statement again and again.)

Deficits are inevitable during a recession. Fortunately, views of persons wiser than Tom prevailed.

It’s elementary that spending, public and private, creates demand for goods and services. In a market economy, businesses respond by increasing production to meet the demand, hiring if necessary. Why then do Republicans insist that public spending is wasteful and should be cut to create jobs? It’s nonsense, yet it’s a persistent myth. Responsible Republicans can’t believe this, yet they repeat it. It’s shameful, but it’s a bigger shame that so many believe it.

We face a similar problem today. To extend prosperity to all, we need to take positive action–invest in America and certainly not arbitrarily cut government spending.

© William Hungerford – January 2015

 

 

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About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
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5 Responses to Demand for goods and services

  1. Anne says:

    A serious rehab of ALL the country’s infrastructure would certainly create more jobs than the couple of dozen that are lost by not allowing the Keystone pipeline through (also, as a bonus, I haven’t heard that any of the First Nations would consider that an act and declaration of war, as the Rosebud Sioux do). And just think what no more bridge collapses would do for the nation’s psyche! The only aspect of this I find troubling is that, as with most jobs of this nature, the bulk of them go to men. I don’t know why non-thinkers like Reed cling to ideas that have been proven over and over not to work–trickle-down economics, anyone?–and somehow ignore lessons from the past that did. I’ve long been an advocate of reanimating parts of the New Deal program. The WPA in particular was not only effective, but look at the legacy it’s left us with: LaGuardia airport. The American Guide series. Camp David, Doubleday Field, the stone steps that line Cascadilla Gorge in Ithaca (and which were a wonderful way to get from downtown to classes back when I lived there). Murals and photographs and schools that still stand. That’s the real renaissance we need, not some hope-to-make-a-trend-out-of-this spew from our rep with no imagination or driving force other than greed.

    • Deb Meeker says:

      So well said, but alas, none of those innovative and worthwhile projects would line Tom Reed’s or other politician’s pockets, quite like making good on promises to their donors.

  2. josephurban says:

    Smilin Joni Ernst made the GOP response to Obama’s SOTU address. She talked about how her “poor family” lifted itself by being frugal and hardworking…oops…another Michelle Bachmann moment. It has now been revealed that Ernst’s “farming” family and relatives received almost ONE-HALF of a MILLION dollars in federal agricultural subsidies. I guess doing all that paperwork qualifies as “hard work” to the GOP welfare families….Just like Tom Reed, whose family lived on SS, now opposing other Americans getting SS.

  3. BOB McGILL says:

    I’ll bet China loves people like you 🙂

  4. josephurban says:

    What Tom Reed does not understand, or chooses not to understand to appeal to his base. All this “public spending” for infrastructure, health care,food, housing, etc. is actually money that is being used to create jobs in the private sector. Which, in turn allows people to purchase goods and services which helps the economy. Does he think that the federal government has a national road crew that fills potholes? Maybe he does! Does he think that the federal government has a crews of construction workers that build affordable housing? Perhaps he believes that! Or a road crew of federal workers who live in the fields picking crops? (Well, they DO have fantasies about that one, I am sure). It is a conundrum. Are these people really that stupid or are they intentionally misleading?

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