Thousands of economists have jobs based on the comical view that the incompetents at the Fed somehow centrally plan access to credit, and the rates at which it's accessed. Rest assured that within a few years, the correct view about the Fed's onrushing irrelevance will be common https://t.co/PeFkGlPySG
— John Tamny (@johntamny) August 22, 2018
John Tamny discusses consumption in only ways that he can in his latest at Real Clear Markets
☕ John Tamny discusses consumption in only ways that he can in his latest at Real Clear Markets.
Indeed, imagine what our economy would look like today if producers of the past had bought into Keynesian thinking only to spend all that they earned. If so, the economy of today would be a slow-growth fraction of its abundant present. We’re wildly productive today to the economy’s productive betterment precisely because producers delayed always easy consumption in favor of investment.
Of course, that’s why Justin Lahart’s commentary on the economy of the present is so disturbingly obtuse. Limited in vision to less than the 1st stage of economic activity, he doesn’t see that his analysis in favor of rampant consumption, if followed, would author exponentially slower growth in the present and future thanks to reduced investment in the technological advances necessary for huge productivity increases. Thanks to past savings in the 20th century, we now have the car, airplane, computer and internet in the 21st. Unseen, assuming individuals actually abide Lahart’s analysis, is what we would lack to our extreme economic detriment in the 22nd century thanks to rampant spending limiting investment in new ideas in the 21st.
To say that consumption really doesn’t matter is ultimately to miss the much greater, booming growth point. Consumption will always be evident so long as individuals are producing. But if individuals continue to forego some or a lot of consumption in favor of investment, just imagine how much more advanced the U.S. economy will be in the future, and with this advance, just imagine how much more the hyper-productive of tomorrow will be able to consume. In short, the answer to economic growth is to ignore the economists, along with the columnists who think like economists do.
☕ John Tamny has a new must-read piece at Real Clear Markets:
“For the end of economy is not the physical augmentation of goods but always the fullest possible satisfaction of human needs” – Carl Menger, Principles of Economics, p. 190