Debt Rattle March 3 2017
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[See the full post at: Debt Rattle March 3 2017]In response to the posting Mr. Meijer made yesterday concerning David Stockman:
Although I appreciate Mr. Stockman’s comments concerning the necessity to discern the quality and quantity of Federal government spending, I have yet to hear him say anything that demonstrates his acknowledgement of where real wealth is generated. The big piece of federal revenue comes from income tax. What is income? It’s production X price.
Stockman come from the Reagan administration. Although I have to admit, I don’t know all that Stockman believes concerning economics, but I do remember a lot of the Reagan people talking about the Laffer curve and supply side economics.
The Laffer curve supposed it was the government’s job to maximize taxable income. This certainly ignores that the government, unless it applies labor to natural resources it owns, does not produce anything. Remember, income is production X price.
And when it comes to supply creating its own demand, the supply siders somehow left out the price part of the equation. Our dear commodity traders have a nasty habit of driving down that price to the point where there isn’t enough national income generated through the trade turn for that supply to be consumed.
I want to commend Hotrod, who, the other day, posted that great interview of Mr. Michael Hudson. Mr. Hudson hammered a lot of nails squarely on the head.
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