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Many say "consumption" drives the US economy. This financial expert says that is completely wrong.
TheBlaze Books ^ | 2015-04-06 | Benjamin Weingarten

Posted on 04/16/2015 9:57:34 AM PDT by fredericbastiat1

If you listen to the news on the economy or financial markets, you have probably heard statements like “consumption drives the American economy,” or “consumption is 70% of the economy.”

But in a new book out that follows in the footsteps of Henry Hazlitt’s classic “Economics in One Lesson” — though in a much more fun package — titled “Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You about Economics,” Forbes and RealClearMarkets Editor, and senior economic advisor to Toreador Research and Trading John Tamny challenges this and much other “conventional wisdom” on taxes, regulations, trade and money.

In an in-depth interview with Mr. Tamny, I asked him in particular about the notion that consumption drives economic growth, to which he responded:

(Excerpt) Read more at theblaze.com ...


TOPICS: Books/Literature; Business/Economy
KEYWORDS: consumption; economy; spending
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1 posted on 04/16/2015 9:57:34 AM PDT by fredericbastiat1
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To: fredericbastiat1

Well, the drugs used to treat tuberculosis ARE expensive...


2 posted on 04/16/2015 9:59:35 AM PDT by WayneS (Barack Obama makes Neville Chamberlin look like George Patton.)
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To: fredericbastiat1
"Consumption" creates nothing.

Did "consumption" create the iPhone?

3 posted on 04/16/2015 10:00:25 AM PDT by E. Pluribus Unum (If obama speaks and th<uere is no one the<ire to hear it, is it still a lie?)
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To: fredericbastiat1

It used to be EXPORTS...................


4 posted on 04/16/2015 10:01:26 AM PDT by Red Badger (Man builds a ship in a bottle. God builds a universe in the palm of His hand.............)
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To: fredericbastiat1

It’s pretty basic that production drives an economy. Without production, there is nothing to consume to begin with, and nothing to trade to others to get things to consume either.


5 posted on 04/16/2015 10:05:43 AM PDT by Boogieman
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To: fredericbastiat1
Everything I needed to learn about economics, I learned from this man:


6 posted on 04/16/2015 10:06:17 AM PDT by Rodamala
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To: fredericbastiat1

ping


7 posted on 04/16/2015 10:07:01 AM PDT by VaRepublican (I would propagate taglines but I don't know how. But bloggers do.)
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To: E. Pluribus Unum

Chicken and egg.

Consumption can create a need that didn’t exist before. The PDA and basic cell phone created a need for the smart phone. Also, the need for a music player created the ipod which in turn created the Iphone. The iphone may not exist if it weren’t for the Ipod and the huge business that it created.


8 posted on 04/16/2015 10:07:26 AM PDT by dhs12345
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To: Boogieman

And as a side note: energy (cheap energy) drives production which drives the economy. Important to note these days when Democrats are talking about a carbon tax to curb global warming.


9 posted on 04/16/2015 10:10:58 AM PDT by dhs12345
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To: fredericbastiat1

Appreciate Mr. Tamney’s views on the economy, and making the obvious point that what we produce, rather than consume is the true measure of economic health.
I’m concerned that his nuanced statement that: “deficits don’t matter”, will be misinterpeted by willing ears all too eager to print money, and continue insane fiscal and monetary policy.


10 posted on 04/16/2015 10:14:52 AM PDT by MarchonDC09122009 (When is our next march on DC? When have we had enough?)
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To: E. Pluribus Unum

I got into a big argument with someone here on FR a while back about the same subject, he just could not stop insisting that consumption is what makes an economy. Those of us who grew up on the farm walking behind a plow know very well that you must produce BEFORE you can consume. You can easily thrive by consuming half what you produce but you cannot make it for one day by consuming twice what you produce unless you can borrow the difference and only an idiot still believes he can borrow his way to a surplus.


11 posted on 04/16/2015 10:18:18 AM PDT by RipSawyer (Racism is racism, regardless of the race of the racist.)
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To: Rodamala

It would be difficult to find a better teacher.


12 posted on 04/16/2015 10:19:28 AM PDT by RipSawyer (Racism is racism, regardless of the race of the racist.)
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To: Rodamala

Your dad?


13 posted on 04/16/2015 10:20:25 AM PDT by huldah1776
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To: fredericbastiat1

14 posted on 04/16/2015 10:21:11 AM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: fredericbastiat1

Without consumption the economy is 0. Without supply the economy is 0. Together you have an economy.

We’re hurting consumption by offshoring manufacturing. People without jobs don’t consume much.

The imports are temporarily cheaper and provide more supply. But that will stop when we run out of money and no one is willing to buy the government’s debt.

Raise the import tariffs, which will put Americans back to work and bring back American manufacturing.


15 posted on 04/16/2015 10:22:17 AM PDT by DannyTN
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To: fredericbastiat1

I know nothing about economics, but basically I think it is a perceived or actual need being filled. Need water? Need food? Told you need an iPhone?


16 posted on 04/16/2015 10:24:08 AM PDT by huldah1776
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To: dhs12345
Without production there can be no consumption.

The people in Venezuela "need" toilet paper.

The "need" for a product does not cause it to come into existence.

The only products that can be "consumed" are products that have been produced.

17 posted on 04/16/2015 10:24:29 AM PDT by E. Pluribus Unum (If obama speaks and th<uere is no one the<ire to hear it, is it still a lie?)
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To: RipSawyer

Savings grow the economy. Money which is saved can be invested in new growth. It can fund opportunities that are unavailable to the impoverished. It allows one to ride through the tough times without being economically destroyed. Savings increase confidence in the future and investing for future opportunities.


18 posted on 04/16/2015 10:24:59 AM PDT by grania
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To: dhs12345

“Also, the need for a music player created the Ipod which in turn created the Iphone.”

No, it didn’t, SOMEONE created the ipod in response to a PERCEIVED need but need has never created anything and the Ipod certainly did NOT create the Iphone. All the needing that I have ever experienced did not create so much as a crumb.


19 posted on 04/16/2015 10:25:24 AM PDT by RipSawyer (Racism is racism, regardless of the race of the racist.)
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To: fredericbastiat1

Bm


20 posted on 04/16/2015 10:26:00 AM PDT by Popman (Christ Alone: My Cornerstone...)
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