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Macro Economics

Posted by Systems Analyst on Saturday, February 28, 2009 12:45:16 AM
Wow. Big word. Macroeconomics. Rolls off the tongue. Sounds impressive. Must be complicated. It means "big trade."

Big trade is not really any different from little trade. In little trade, you have a fistful of dollars and you want some things from the store. You go to the store, realize you don't have enough dollars to buy everything you want, so you get what you need first. With the dollars you have left over, you decide if you want to buy a few luxuries (things you want but don't need) or if you want to keep the dollars for another time.

Meanwhile, you know you are going to need more dollars, so you find something that you have that other people will pay for, and sell it. Usually this is the application of a skill or a product of your own labor. When you find someone who will pay you for applying your skill or producing things with your labor, you are "employed." After you get your new dollars, you can go back to the store and get more things you need and/or want.

Macroeconomics, or big trade, is what happens when millions, or even billions, of people become employed so they can go to different stores to buy things they need or want.

An economic boom happens when most of those people get more dollars from their employment and feel free to spend them on things they want. An economic downturn happens when a lot of those people discover that they have spent too many dollars on things they don't need, and are afraid they might not have enough dollars to buy the next things they do need. An economic depression can occur when people who are employed providing things people do not need discover that too many people are afraid to buy things they do not need will no longer employ them. This is usually accompanied by people buying less of the things they do need, which means that everyone gets fewer dollars from their employment.

Recovery from an economic depression, recession, or downturn almost always comes from some number of unemployed people finding another skill or product for which other people are willing to give them dollars. These people then become employed again, and once again everyone has enough dollars to buy what they need, plus a few things they don't. This happy situation is called "prosperity."

Notice that nowhere in this process is anyone forced against their will (by taxation, for example) to buy a particular skill or product.  Think about that for a while, and we will talk again soon.

Tags: economy  
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A Busy Day

Posted by Systems Analyst on Friday, February 27, 2009 4:05:58 AM
This is my first post. I am inclined to take a paragraph or two to introduce myself, but a lot of things happened today that simply demand comment. So, in the interests of brevity, let's just get started.

The AP reported that the House approved the waste of yet another 410 billion dollars of your money. What a shock.

In the course of the "debate," Rep. James McGovern, D-Mass., is quoted to have said, "The same people who drove the economy into the ditch are now complaining about the size of the tow truck." This was his response to the ridiculous notion that maybe we should consider slowing the pace of spending, considering that the money involved doesn't exist and all.

OK, Mr. McGovern, let's make sure I understand this correctly. Spending 1 trillion dollars more than we have creates economic ruin. However, spending 2.2 trillion dollars that we don't have puts us on the road to riches. Is that how it works?

On a local note, a couple of days ago in Orange County, California, a grand jury determined that Orange County Sheriff Sandra Hutchens is right to take gun permits away from people who already hold them. To justify this violation of trust, not to mention the Constitution, the grand jury report is quoted to say, “An orderly society is the goal. Public safety is the paramount consideration. The fact that public clamor has reached the ears of politicians is irrelevant.”

Who are these people who believe that only a helpless society can be orderly or safe? And what does Sheriff Hutchens intend to do to the people of Orange County that requires they be unable to defend themselves? And what nation is Orange County, California a part of such that the will of the people is irrelevant?

Finally, I just can't help myself. I have to take this cheap shot. Get ready, here it comes....

<CHEAPSHOT>The Obamas are going to get a dog. Not just any dog. It seems that only a Portuguese Water Dog will do, whatever that is. Apparently, an American Mongrel is not good enough for their Imperial Highnesses. After all, they won, and we didn't.</CHEAPSHOT>

For future reference, cheap shots will always be surrounded by the pseudo HTML tag <CHEAPSHOT> and </CHEAPSHOT>. I hope this will separate the baseless sarcasms from the serious commentary.

That's all I have to say for the moment. I would like to ask a personal favor, though. Don't just quote slogans you heard from NBC. Keep your chin up, be well, and think about things for yourself.


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