lesson in economics that even a simple minded right winger can understand

[Max E.]

Quote from Ricter:

The carrots cost too much because they've inflated (excessively), or because wages have stagnated (or worse)?

In your opinion if you had to make a choice between attempting to inflate wages, or allowing the price of a carrot to go down, which situation do you think would cost less money, and be easier to accomplish?

 

[Ricter]

Quote from Epic:

There is a significant flaw in the analogy that pretty much destroys the entire argument. The analogy is based on the premise that "savers" who do not have an immediate consumption motive effectively remove wealth/money from the system. It even goes so far as to suggest that the person might "bury it in the backyard". When a person makes an argument with such language, she is usually attempting to be pithy without recognizing that this is a pivotal statement in the argument.

This is the breakdown for the person who doesn't understand economic reality as it relates to any type of monetary exchange including consumption and taxation.

The main point is that almost nobody in this country removes money from the system. .

We know that. The point of the "hole in the ground" element is to indicate that the carrot grower is not going to be using the money, and neither is the bank going to be loaning it unless there is demand for a loan--the hole in the ground is the bank, if there is no demand for money.

 

[Ricter]

Quote from Max E. Pad:

In your opinion if you had to make a choice between attempting to inflate wages, or allowing the price of a carrot to go down, which situation do you think would cost less money, and be easier to accomplish?

What economic agent am I, for the purpose of answering this question?

 

[Mav88]

Quote from Free Thinker:

really? i grew up on a farm and owned one until about 5 years ago so i more than "worked" on a farm.
harvesting is not free. it costs a lot of money to harvest,ship and store the crop. why would he invest that kind of money on the off chance that he migh be able to sell them for a "small price" that doesnt come close to the harvesting costs??

but I said that Kofi would harvest for a cut of the carrots, in keeping with the analogy.

 

[Brass]

Quote from Ricter:

We know that. The point of the "hole in the ground" element is to indicate that the carrot grower is not going to be using the money, and neither is the bank going to be loaning it unless there is demand for a loan--the hole in the ground is the bank, if there is no demand for money.

Beat you to it:

Quote from Brass:

In keeping with the scenario, what if businesses aren't borrowing because there is no demand for their wares because potential consumers don't have the money to buy product? However full the tank may be, the motor only works upon ignition. I think you missed the point of the analogy.

 

[Mav88]

Quote from Free Thinker:

at least you have admitted that the massage therapist has no need to hire employees with out demand. are we making progress?

Robert can simply fire his employes when times go bad, the problem for Robert is that he has money tied into rapidly depreciating assets. Doctor's offices don't, nor does someone who owns a massage therapy business with employees.

 

[Max E.]

Quote from Ricter:

What economic agent am I,

Jason Bourne?

 

[Max E.]

Quote from Ricter:

What economic agent am I, for the purpose of answering this question?

Your the government, not bernanke.

 

[Brass]

Quote from Mav88:

Robert can simply fire his employes when times go bad, the problem for Robert is that he has money tied into rapidly depreciating assets. Doctor's offices don't, nor does someone who owns a massage therapy business with employees.

Your problem is that you think all massage therapy businesses have happy endings.

 

[Mav88]

Story rewind: Conservative versus liberal.

We see the liberal side, give the money to the least productive citizen, Kofi. Others like Robert and Sylvie supposedly do all the work hoping for Kofi's gov't money while Kofi gets to sit around doing nothing. Robert still has no harvest money and liberals don't care, so he must take out a loan or ask Sylvie to wait for Kofi's money. When all is said and done Kofi has no incentive to do anything except go back to doing nothing and await his next payment from Obama.
Notice where all the risk is? what if Kofi decides he wants beer instead?

OK so here's the supply side:

Give the money to Robert as a tax break instead with the stipulation that he must harvest ASAP. He hires BOTH Kofi and Sylvie assuming that Kofi is willing since he wants to eat. Now everyone has contributed to production and everyone gets to eat.