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> I’m not following your line of thought. Nobody claimed they made up the entire economy, and they don’t right now even amidst a multi-state stay-at-home order.
by generalpass 6y ago
> I’m not following your line of thought. Nobody claimed they made up the entire economy, and they don’t right now even amidst a multi-state stay-at-home order. So, I’m not sure what you are arguing against.
> There are essential parts of the economy and non-essential parts of the economy and they can certainly exist without each other. In fact, they did when society’s first formed. Then, they focused on a different level of the hierarchy of needs but it was still an economy. Food was produced and houses were built before cars, cell phones, and video streaming ever existed.
> I skipped the last part because while it is true that those things lead to “civil unrest”, you haven’t proved that we meet your own conditionals. What is “some percentage”? What is “actively blocked”?
> For example, I see government subsidies all over the place. To the tune of $2 trillion so far with almost certainly more to come.
You have demonstrated a very poor understanding of economics. Chiefly, you appear to believe you understand everything in the economy since you feel some parts of the economy may be declared as essential or non-essential. This differentiation is impossible, best demonstrated in the I, Pencil[1] essay by Leonard Reed. The economy is more complex than anyone can comprehend.
As far as ancient man, you can, at this moment, give up all the luxuries of modern life and live in the mountains, but if everyone did that there would not be enough food.
The people currently forced out of work were producing things that increased our standard living and contributed to the wealth of civilization. This wealth makes its way, through various and complex ways, to nearly every corner of the economy. You will not be able to be certain there is enough food production or adequate health care without these people taking a part in the productive economy. The longer we go with parts the economy locked down, the more likely that very serious problems arise, such as empty grocery store shelves and hospital closures.
The government subsidies to retail consumers will result in increased consumer price inflation. This was last experienced in the U.S. in the 70s as a result of the "guns and butter" policies of the 60s, which the butter being what lead to the consumer price inflation. The same inflation has not arrived now because the increase in the money supply has been in financial instruments, which causes other problems but hasn't appreciably increased consumer price inflation.
Once higher rates (say, >10%) of consumer price inflation get going, it becomes extremely difficult to arrest. The usual way this is managed is either by increasing interest through Federal Reserve policies, which peaked at around 20% to take care of the inflation of the 70s, or through hyperinflation followed by the issuance of a new currency, which occurs after the value of every single asset has been completely wiped out, with examples if you want to know more being Weimar Republic Germany or Revolutionary War Continental Dollar. Note that interest rates held at less than 3% are still yielding percent of national budget in service to debt at I believe 5%, so if we have the problem of consumer price inflation hitting higher interest rates, the percentage in service to the debt is going to go up very quickly, though not instantly because the bonds have to expire.
Also of note is that a lot of people are complaining that the checks from the government are not arriving, as was popularly demonstrated in a recent clip of New York Governor Cuomo attempting to respond to a reporter asking him about what people who have not received their checks should do. New York is not the only state where there are reports of this problem.
[1] https://en.wikisource.org/wiki/I,_Pencil https://en.wikisource.org/wiki/I,_Pencil