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To: So Cal Rocket
But economic growth isn't driven by consumption; it's driven by production.

Is this not the chicken or the egg? What drives production if not consumption?

4 posted on 02/27/2004 7:34:11 AM PST by Huck (OK. I'm over it.)
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To: Huck
"Is this not the chicken or the egg? What drives production if not consumption?"

Production must precede consumption, therefore what drives production is the desire and intent to consume, not consumption itself. Businesses invest huge sums to build factories to mass produce products based on forecasts of what sales will be when the product is available to sell. This can only be done in a stable environment which allows business owners to assume that the government will not tax away the profits of the business as well as the incomes of their projected future customers.
The folly of the socialists (Democrats) is in believing that the stream of commerces is like a river which will continue to flow to them even if they use all the water and allow none to proceed downstream. It should be obvious that at some point of taxation a person will simply give up and turn to some method of earning a living that will allow them to keep what they earn, in other words, an underground economy.
I have seen the same sort of thinking demonstrated recently at the factory where I am now reduced to working as my only means of securing medical coverage for my wife. The management actually cut wages by five percent last year in the mistaken belief that this would save money. What really has happened is that people have become discouraged and several of the most experienced people have left or been fired, which has required hiring new people who must be trained at great expense, overtime has shot up due to people slowing down and doing less work, mistakes have greatly increased and I feel safe in saying that a five percent INCREASE in wages would have cost much less than the five percent cut.


19 posted on 02/27/2004 8:30:09 AM PST by RipSawyer (Mercy on a pore boy lemme have a dollar bill!)
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