All Posts Tagged With: "consumption"

Taxing Investment

The income tax double-taxes saving relative to consumption, that is, reduces the returns to saving twice, while reducing the returns to consumption just once.

23Jan2012 | Roy Cordato | 13 comments | Continued

The Right Amount of Manufacturing

Mark Perry, an economics professor at the University of Michigan, recently pointed out that in 2009 the U.S. economy had the world’s largest manufacturing sector. (The most recent data show that China’s sector edged out the United States because of our slow economic recovery.) Every year since 2004 U.S. manufacturing output, in constant 2005 dollars, [...]

22Jun2011 | David R. Henderson | 7 comments | Continued

How an Economy Grows and Why It Crashes

Ignorance of economics is rampant. The average person believes the secret to prosperity is consumption and was often led to that fallacy by professional economists who should know better. Economic education in the universities has been as much a part of the problem as the solution, with millions of students taught Keynesian beliefs about government [...]

22Jun2011 | Robert Batemarco | 4 comments | Continued

Capitalism as Art

Both entrepreneurship and consumption are acts of creativity, imagination, and art.

9Jun2011 | Steven Horwitz | 3 comments | Continued

Consumption, Innovation, and the Source of Wealth

Innovation by producers, not consumption, is what creates wealth in a market economy. Sometimes the simplest truths are the hardest for the self-proclaimed elite to understand.

6Jan2011 | Steven Horwitz | 8 comments | Continued

Consumerism Is Keynesianism

One of the most pernicious and widespread economic fallacies is the belief that consumption is the key to a healthy economy.

9Dec2010 | Steven Horwitz | 81 comments | Continued

Does Saving Reduce GDP?

Warren C. Gibson’s article, “GDP: Who Needs It?” in the May 2010 edition of the Freeman, asserts an inconsistency. He correctly denigrates the Keynesian notion of promoting consumption spending as a means of promoting GDP growth: “The predominance of consumption seems to have spawned the bizarre notion that if we can only get consumer spending [...]

24Nov2010 | and and James C. W. Ahiakpor | 2 comments | Continued

Paying the Unemployed Does Not Stimulate an Economy

Many in Congress as well as the President and some of his economic advisers have argued that extending the period for paying the unemployed will stimulate the U.S. economy out of its sluggish performance. Would any of them consider as valid an argument that giving money out of their own pockets to an unemployed member [...]

24Nov2010 | James C. W. Ahiakpor | 17 comments | Continued

A Nation of Consumers?

A fundamental tenet of economics is that the end of production is consumption. Unfortunately, Keynesian economists seizing the public microphone claim the purpose of consumption is to clear the shelves so producers will have something to do in the future.

17Nov2010 | William L. Anderson | 9 comments | Continued

What’s So Bad about Eco-Propaganda for Kids?

Although my own children have long outgrown picture books, I still have nephews and nieces young enough to enjoy them. So I buy them from time to time. I also buy books on energy. Perhaps it was that combination that prompted Amazon to recommend What’s So Bad About Gasoline? by Anne Rockwell, engagingly illustrated by [...]

22Sep2010 | Andrew P. Morriss | 23 comments | Continued

Is It Spending or Consumption?

Anyone who believes an economy is nothing more than a mechanical operation in which some people produce, others spend, and then government makes up the difference really does not understand economic processes.

21Jul2010 | William L. Anderson | 1 comment | Continued

Consumer Spending Doesn’t Drive the Economy

The truth is that consumer spending does not account for 70 percent of economic activity and is not the mainstay of the
U. S. economy.

17May2010 | Mark Skousen | 49 comments | Continued

TGIF: Government as Consumer

Destutt de Tracy, like other liberal, free-market economists of early nineteenth-century France, saw the State essentially as a predator, a destroyer of value, and the source of class conflict. Read the rest of TGIF here.

12Mar2010 | Sheldon Richman | 0 comments | Continued

Saving Is Killing the Economy?

In the midst of the current recession, many of the oldest fallacies in economics are making a comeback. In a column titled “Why Saving is Killing the Economy,” senior writer Chris Isidore repeats one of the oldest: that the key to economic recovery or growth is consumption and that saving retards that process. Isidore states [...]

19Aug2009 | Steven Horwitz | 6 comments | Continued

Keynes’s Ghost

The multiplier argument is founded on two key assumptions that turn out to be false. First is the notion that savings are not spent but rather are withdrawn from the expenditure stream. The multiplier’s second incorrect premise is that government expenditures are “autonomous”; that is, government spending does not depend on current income.

9Jun2009 | James C. W. Ahiakpor | 5 comments | Continued

The Trouble with Keynes

Keynesian theory implies an inherent instability in market economies. Thus the theory cannot possibly explain how a healthy market economy functions—how the market process allows one kind of activity to be traded off against the other.

1Apr2009 | Roger W. Garrison | 3 comments | Continued

Exporting and Importing at the University

I’ve been an economics professor at public universities for going on 40 years—the last 30 at Ball State University in Muncie, Indiana. In the parlance of economics, this means I’ve been a long-time “exporter” of economics knowledge. Those paying my salary—students, parents, and taxpayers—have been “importers.” Students and parents import voluntarily. Taxpayers less than voluntarily. [...]

1Apr2008 | T. Norman Van Cott | 0 comments | Continued
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