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People forget that the economy is not about money, it's about stuff - the goods and services that add (economic) value to our lives: food, shelter, video games,
by Nifty3929 2y ago
People forget that the economy is not about money, it's about stuff - the goods and services that add (economic) value to our lives: food, shelter, video games, medical treatments, shoes, etc.
The problem isn't the deficit - it's the spending. When the government spends money, it takes people away from whatever other economic activity that person would be doing, and consumes their labor in service of the government instead. This reduces economic productivity, and we all end up with less stuff as a result.
The key is to focus on productivity in terms of stuff (not money) - everything else takes care of itself.
This is important because focusing on money and the deficit often inspire solutions that attempt to solve those problems, but at the cost of hurting productivity. Higher taxes, for example. Raising taxes may (arguably) raise revenue and reduce the deficit - but may well also reduce productivity. That would be bad.
- c22 2y agoWhy is government spending a black hole of productivity? Does it not result in "stuff"?
- oceanplexian 2y agoYes, because the government does things like staff a building with 100 government employees that could have been replaced by a simple website if it was done by a private company.
- Nifty3929 2y agoOr, more the point, staffed by 100 employees that could have otherwise been producing houses, shoes, food, medicine, movies etc. But they aren't doing those things because they are busy working for the government.
- gamblor956 2y agoThere is no chance that the 100 employese making the website would have been making houses, shoes, food, medicine, etc., because they wouldn't have the skills to do any of that. The alternative to working for government making a useful website that would be productively used by millions of their fellow citizens is working for yet another "startup" making Yet Another Pointless Social Media or AI scam with no revenue model beyond getting acquired by a bigger company.
- c22 2y agoI've seen a private company spend thousands of dollars developing a website and then not even launch it. Bad decisions exist across the entire human experience, public and private.
- user90131313 2y agoDifference is in private company, owner or investors pays for that decision. In a goverment mostly who pays for the bad decision ??? yes.
- c22 2y agoAccording to all the comments I'm replying to here there's no difference and it's everybody because the people wasting their time aren't making shoes.
- tdb7893 2y agoTheoretically the government is spending productivity for services so the argument that government spending is not creating stuff is a little weird (though obviously they are often less efficient). There are even lots of situations where government spending increases productivity in significant way (e.g. public education)
- deleted 2y ago[deleted]
- consteval 2y agoI don't think this is universally true. I mean, take a look at the New Deal. The problem here, in my opinion, is that the US does not make enough stuff. We have a lot, and I mean a lot, of "fake" jobs. Jobs that move things, not produce things. All the actual stuff we consume is made overseas. We've essentially given up our economy in exchange for making middle men of middle men of middle men. Our economy, I feel, is largely theoretical. If we look historically at times of economic boon, there's a common thread. Huge increases in manufacturing and production of goods. The 50s weren't prosperous because of taxes, they were prosperous because of WWII. And, if you look, most of this increase stems from the government. Whether it be war or triple letter agencies making stuff.