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Monday, March 29, 2021

The Rat Cap Podcast: Episode 11

The Rat Cap Podcast: Cargo Cult Economists and Why Stimulus Spending Cannot Stimulate (libsyn.com)

The government is spending trillions in "stimulus," but what does stimulus mean?  In simple terms, what is economic prosperity, and why is it logically impossible for the government to achieve it through so-called stimulus spending?   

Further reading: 

Production Versus Consumption (capitalism.net)

The Rational Capitalist: Cargo Cult Economics (theratcap.com)

The Rational Capitalist: Obama: Please Try This at Home (theratcap.com)

The Rational Capitalist: Production and The Primacy of Existence (theratcap.com)

1 comment:

Carl said...

Doug, a couple of thoughts about Episode 11:
- The reason Economics is not "allocation of resources" is because the equation involves human decision making. If not for the pesky humans, economics would just be an equation.
- Regarding your island example (and European migration to North America): Wealth creation comes about by human time (in the form of labor) transforming raw materials to produce some useful good. I think people really don't recognize how much time and human effort is involved to create the wealth we currently hold. And, this is where the deficit is really troubling - the money represents human labor yet to be performed. Later generations will have to work long and hard to pay off $30T.
- Primitive electricity - couldn't help but think of the scene from Gilligan's Island where they were stirring coconuts to recharge the batteries in their radio.
- Regarding stimulus, your major objection seems to be that the money is spent on consumption. Would you object less if the money was restricted to only capital goods (recognizing capital goods can also be seen as consumption, especially in the long term)?